Owning a car is often a necessary part of life, particularly if you live in the United States of America or any of the other North American countries for that matter. Space is large, and distances are great, and not being able to drive where you want and when you want can really limit your ability to get around. Owning a car is a necessity, and yet buying a car is still a huge financial responsibility, and this is particularly true if you have a bad credit score. Rather than despair or worse, get into a terrible deal, follow these tips on how to properly finance and afford a new car.
Start Building Your Credit Score Now
First things first, you have to address your bad credit score head on, which means you will need to get on top of your back payments. Trying to buy or afford anything when you are so far in debt is a bad decision. Not only will you be saddled with high-interest rates, but you will be stretching your budget even thinner. Deal with your debts. If needs must, apply for debt counselling so that you can get set on the right path. Once you have done that, you can start building up your credit again. Use one credit card and pay everything off promptly. If you absolutely need a car, you can look for one while you are building up your credit, but try to hold off until after you have dealt with your debts.
Save on Depreciation and Choose a Used Vehicle
When you have bad credit, being able to pay off what you owe as fast as you can is the best choice. It means saving money upfront, and the best way to do that with regards to vehicles is to buy used. Used vehicles will already have experienced the largest brunt of their depreciation, meaning you can enjoy even a model that is one or two years old for a significant discount. You do want to be careful when choosing a used car, however, especially if you are trying to buy one from a private seller. If you don’t know the ins and outs of a car or know someone who does, always go to a dealership. They certify their used vehicles so you can rest assured that what you see is what you get.
Save as Much as You Can for Your Down Payment
Ideally, you should have enough for the down payment to pay off at least 20% of the car, though 10% is acceptable. Then, you should look for bad credit car loans, by turning to trustworthy and reputable sites. However, be sure to explore all options offered to you, so that you select an auto financing option that’s right for you. By following these steps, you’re able to rebuild your credit while also enjoying a new car. It’s a win-win situation, really.
Buying a car when you have bad credit might seem like a nightmare, but it’s not impossible. Instead, lower the price of a decent car as much as you can by buying used and negotiating, and then use a bad credit loan agency that will help you finance your car and build up your credit at the same time.