Bad Credit Car Financing

Posted by admin on November 23rd, 2009 at 03:42pm

Question:
Can somebody get bad credit car financing at 0% if they have poor credit but put down a large down payment?
I wish to pay cash for a used vehicle (15 thousand). I have the cash, but I want to establish more credit, and would like a car loan so I can pay for it in just a few payments.

Answers:
That is a complex question. You could, on paper, show 0% interest, when you are just paying off the interest out of the entire profit from the vehicle. Each major finance company I’m aware of offering 0% requires that the buyer qualify for a certain tier level to get such a rate, and with bad credit, you probably will not qualify. So the general answer is this: a snake can show you 0% and you’d never realize you just paid the twenty percent rate out of your large down payment.
Furthermore, paying it off in less than one single year really won’t help your credit score very much. On the other hand, a cd for part of that $15 thousand may earn you enough to offset a portion of your higher interest rate.

Yes you could obtain a 0% rate. Your credit rating is only one of the factors in the formula. Duration of employment, income, duration of time at residence, and sum of down payment are the other big factors. Many manufacturers are offering 0% on left over ‘08 model new vehicles now. If you currently have up to $15 thousand to put down I am certain you could qualify.

Under Cars and Bad Credit