Buying a Car With Bad Credit: 3 Things to Know

March 21st, 2016 by

Before you head over to your local buy here, pay here dealer in Cincinnati to get a car, it’s important to know a few things about bad credit car loans first. The first one is, you don’t need any warranties or other add-ons to get financing; contrary to popular belief. Secondly, a credit union is more lenient than a bank when it comes to giving out bad credit car loans. Finally, there is such a thing has having a credit score that is too poor.

While out looking around for a buy here pay here dealership, or a bad credit car loan, keep these tidbits in mind. They could potentially save you some money.

You Don’t Need Warranties or Other Add-Ons for Financing

Contrary to popular belief, you don’t need any add-ons. By add-ons, I mean two things. The first is anything the dealership might offer you, like mileage warranties, rust protection, etc. These are all unnecessary, especially if shopping at a buy here pay here dealership. Why? Because, chances are the car you are getting is going to be a used one. This means you don’t want to put warranties or rust protection on something that could give out sooner than later. Plus, it raises the price of the vehicle. If you have bad credit, you need to save every penny possible to put towards a car payment.

Secondly, add-ons could include any bells and whistles like a sun roof, leather seats, a touchscreen vs. a standard AM/FM radio, or any other frivolous perks. Again, the idea here is to save money and get a car in good condition. Therefore, if a car with leather seats has 150,000 miles on it, and the same model without leather seats only has 50,000 miles on it, which one should you pick?

Avoiding add-ons like this is a great way to save money, especially since they are not required at all to get financing on a car.

A Credit Union is More Lenient Than a Bank

Before you go to the dealership, you might decide to explore financing by other means. If that’s the case, don’t overlook credit unions.

As far as lending goes, credit unions are much more flexible than a typical bank. If you aren’t a member, find one and sign up. If you are, ask what they can do for you about bad credit auto financing.

Typically, it’s better to just go through the dealer. You will get a much better deal than anywhere else. But, if your credit score is even too poor for a dealership, a credit union should be your next stop.

There is Such a Thing as Having Too Poor of a Credit Score

Which brings me to my next point, your credit score can actually be too bad for bad credit auto financing. Why? It’s simple. If your credit is too bad, a dealer or third party lender might not want to risk financing you because you are considered high-risk when it comes time to paying your loan monthly. I’m not saying you personally, but people default on bad credit car loans all the time.

Since your credit score is viewed differently from dealership to dealership, there is no set line to gauge your score by. However, buy here, pay here dealerships will typically take people who have no credit. Therefore, not all hope is lost if you get denied everywhere else.