Auto Financing with Bad Credit

Having bad credit does not mean that auto loans are unavailable. The auto industry wants and needs all of the business that it can get, and will help find ways to help you finance a new car. The following suggestions will help anyone with the will find a way to finance their next car, regardless of credit history.

Find a Car You Can Afford…

The first step to getting a car loan is to know how much money you can afford to pay for a new car. Having the ability to repay a car loan is essential to borrowing money to buy a car. For that reason, a monthly payment that is affordable must be determined first.

Once the monthly budget for a car payment has been established, a visit to an agency that has autos that can be purchased within that budget range is a good idea. The overly friendly salesman will show you which cars fall into your budget range. Once a specific car has been selected, it is time to discuss finances with the finance specialist who awaits your visit in the finance office at the agency.

Once a credit application has been filled out, and he has obtained your personal credit report, things will begin to fall into place. The finance specialist will do everything in his power to find a suitable car loan for you. This is his job, and he makes no money if he can’t find a way to finance a car for you.

Securing a Loan…

Sometimes, bad credit is not as large an obstacle as might be thought. Since a car serves as collateral for a loan, having a reasonable sum of money available as a down payment can be the secret to getting a loan. Many people with poor to bad credit find loans available because they have a ten to twenty percent down payment to offer.

All loans are viewed from a risk viewpoint. Those with very bad credit histories will need large down payments in all probability. Without substantial down payment, it may be necessary to have a family member with good credit co-sign the note with you. In that case, they guarantee the payment of the loan if you default.

Involving a family member is risky. Their legal responsibility is absolute, and they must make the loan payments if you cannot. For that reason, this should be a last resort option that is only used judiciously.

Credit Repair…

If present circumstances block all attempts to successfully get a car loan, you should investigate the possibility of rehabilitating your credit history. If small unpaid bills are presently a part of your credit history, making satisfactory arrangements to repay old debt may the secret to getting a car loan in the near future.

It is highly desirable to face whatever problem areas exist in one’s credit history. When effort to repay old debt can be demonstrated, many financial doors begin to re-open. Fixing bad credit is always desirable.


Recent economic turmoil, and unemployment have caused many to have bad credit histories. Car agencies need new business because of the same turmoil. For that reason, anyone needing a new or better car should visit a motivated car dealer. Car dealers know all of the “tricks of the trade” when it comes to negotiating the world of automobile financing. Since they want to sell you a car just as badly as you want to buy one, chances are you will enjoy success in financing your new car.