So you happen to have a history of bad credit. Still, your status should not stop you from owning your very first car. After all, it’s very much possible to secure car financing, even if your credit history and/or rating is less than stellar. In other words, shouldering bad credit should not mean the end of your car-buying dreams.
A bad credit rating is typically determined by several criteria. It can include your missed mortgage or credit card payments. It can also be affected by any bankruptcy claims that you have filed. While banks and other credit institutions may have determined you too risky to be granted a car loan, there are a number of automobile financing firms who are more than happy to grant you car financing, despite your credit history.
These companies will work with you to determine the most ideal payment terms for your situation so that you can easily afford to pay for your car. But, in case you are not sure how to go about it, heed some of these tips on how to make the most out of a bad credit car finance:
Determine What You Can Afford to Regularly Pay
Before thinking about interest rates and loan terms, you need to determine how much you can afford to pay for your car each month. The best way to do this is to compute the total cash you earn each month and deduct all of your monthly bills from it. After these expenses and other critical expenses have been calculated, take note of the balance that’s left. This is now the maximum that you can afford to regularly pay. Stick to this formula no matter the amount of the loan.
Be Modest About Your Car Selection
As much as possible, you need to be smart and economical about your car model of choice. Forget about muscle cars and sports cars. Go with a reasonably priced vehicle model that you can easily afford. At the same time, consider buying one with good fuel efficiency, too. This will save you expenses throughout the life of your loan.
Forget About the Extras For Now
For now, it is important to keep your car shopping simple so that everything fits your budget. Therefore, you may need to skip models that offer a lot of extra features and options, such as premium speaker systems, sunroof, heated seats and the like. Instead, go with a model that is comfy enough to make you happy.
Don’t let your bad credit history stop you from getting your very own car. But, pay heed to your budget and choose the model with a price tag that fits it. Once you’ve secured your new car, remember to pay for it in accordance to your finance terms and schedule. In doing so, you are also working toward improving your credit rating and history.
How to buy a car with bad credit, consumeraffairs.com
Getting car finance with bad credit, carbuyer.co.uk
12 Tips for Buying a Car With Bad Credit, thebalance.com