Affording a car is one thing but doing it when you already have bad credit is quite another matter. There are different ways to deal with the issue. We’d suggest a multi-pronged approach to finding a complete solution that will work for you. Here are some suggestions for how to afford a car with bad credit.
Seek Bad Credit Car Finance
When you’ve already got bad credit, you are likely to get turned down when applying for a standard personal loan or a car loan. The application process may lead to other “loan application denied” notices later too. Instead, it’s better to accept the reality that in the meantime, your credit isn’t fantastic. Plan a car loan by seeking out bad credit car finance. This relies on lenders who already understand your situation and are prepared to consider an application from someone without a stellar credit score. This avoids repeatedly being denied, which can get quickly frustrating.
Save First to Reduce the Borrowing Amount
Getting approval for any type of loan typically considers your current income level and what you are applying to borrow. The assessment of the loan’s risk level provides an indicator of the likely cost of the finance. However, if you are looking to borrow too much where your monthly payments will consume an excessively large percentage of your wages, it’s harder for the loan to go through.
Instead, reduce the amount you need to borrow by saving some money first. It will delay the purchase date, but it also reduces the principal on the loan. This can be the difference between affordable monthly payments and a denied application because it is unaffordable in the eyes of the lender.
Negotiate a Better Price for the Vehicle
A harder negotiation can cut the purchase price of the vehicle. This will further reduce the sum needed from any financing. Learning how to negotiate – going to the point of studying it – is worthwhile if it can save you a considerable sum. Even taking a short course with roleplaying as the buyer and later the seller builds skills and confidence. Lower prices can result.
When purchasing a second-hand vehicle, there is even more room to negotiate. Don’t be shy about it because a vehicle is one of the largest purchases you’ll make in life. So, it’s worth becoming a skilled haggler to save money.
Buy Less Car to Afford the Payments
Fixing your mind on a particular make and model or a certain size of vehicle limits your choices. When you’ve tried the other suggestions above and you’re still struggling with finance, the last option is to “buy less car”. By this, we mean selecting a model that’s a little smaller, has a less powerful engine, not as many bells and whistles, or more mileage on the clock. Any of these can drop the purchase price into a more affordable range.
Affording a decent car on bad credit can involve just taking out an appropriate loan. But as we’ve demonstrated, a layered strategy increases your odds of getting approved and can save you money too.