Not as hard as you may think, although it?s quite an obstacle if you have no knowledge of how to, buy a car with bad credit. There are two different types of lenders that you can apply with, some of which do not allow for financing outside of a dealership, only through dealer finance departments.
Prime lenders offer auto financing to people that have good credit. Usually the minimum credit score to get a loan through one of these companies is 700 or higher. You can expect incredibly low interest rates with these types of lenders if approved.
Sub Prime lenders offer car credit for people that have credit scores below 700. Buying a car with bad credit by using one of these types of lenders is much easier because they are used to dealing with people that have bankruptcies, repossessions and similar credit problems on their applications. Verifying income and employment history, proof of residence and U.S. citizenship are normal requirements with these types of companies. They?ll want to know that you are who you say you are, and that you can afford the loan that you?re going to be making payments on.
Expect to pay a higher interest rate with sub prime lenders, as you?ll find that their rates can rival those of credit card companies in many cases. Avoiding dealers that provide in house auto financing can be a plus if you can get a loan through a normal channel, such as a good sub prime lender through a normal car dealership.
Some new car dealerships can provide sub prime lending through the manufacturer finance programs. Ford Motor Credit is one such example of this, providing auto loans for those with credit that normally would not be able to get approved for lettuce on a big mac. That?s an old saying in the car business for people that have really, bad credit.
Thanks for reading and I wish you the best on your car buying endeavors. Life is short, so drive fast!
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