Car Bad Credit

Posted by admin on November 2nd, 2008 at 12:00am

Question:
I have the funds to make monthly payments on a new car Bad credit will not permit banks to work with me. What should I do?
Most banks are rejecting me for car loan and if a bank approves, they want a huge down payment up front.

Answers:
Many dealers have financing available through the dealership. The thing is that if you’ve got poor credit, your interest rate will be substantially larger than someone with decent credit.
I’d actually recommend that you save the money you would pay monthly for a car and purchase one when you have a bigger down payment and not so huge of a loan, or pay cash for an old vehicle.

That’s the penalty you pay for getting car bad credit. You’re a verifiable bad risk and have a history of not being able to pay on time or defaulting on your debts.
Pay with cash on everything. Stay away from the credit trap. And do not pay unnecessary interest to other people.

This would be because if you haven’t made payments to your debts in the past, why would they believe you will now. Credit will have tightened up all over the place. You will need a decent down payment since banks are really tight, so you may do better to see about a buy here pay here sort of car dealer. Rates will be higher but a lot easier to obtain financing. Try to fix up your credit or it will haunt you.

It seems like anything you do will require you to start saving now. You could either save up enough cash for a large down payment, or just continue saving enough money to pay for the car in cash. The second option is the best idea financially, because of the interest you will save. On the other hand, you need to rebuild your credit back up, and you should perhaps do the former, and make sure you pay every single payment on schedule.

Under Cars and Bad Credit