Three Ways To Get Financing For A Car If You Have Bad Credit

If you need a car but you have bad credit, you may think you are unable to finance the purchase of a car. The good news is that there are various ways for someone with bad credit to get a car loan. The following are three of them.

Look for dealer financing

Large dealerships will often carry their own financing or work closely with a particular lender that offers financing for car buyers with bad credit. If you are not sure if a dealership will finance a car, you can always call in advance. There are a couple of things you need to keep in mind. Dealerships that do this will often steer you towards their slow moving models, but this is not a bad thing. If you have bad credit and you need transportation, the most important part about a car is that it is dependable transportation. A popular model is not important. You need a car to get to work and get around town.

Have a larger than average down payment

Save up your money until you have a sizable down payment. The larger the down payment the better your chances are of getting a car loan. The reason for this is when you finance your car, the lender can quickly determine how much initial equity the car will have. The equity of the car is simply the value of the car minus the amount of the loan. If there is enough equity in the car, a lender will be less hesitant to approve the loan. You should also focus your attention on a used car. New cars depreciate the moment you drive them off the dealer's lot. Although the same is true with a used car, the depreciation is much less, so your down payment will be more significant in creating equity in the car.

Look for lenders who specialize in bad credit car loans

There are many lenders who routinely approve car loans to people with bad credit. You can find them locally or online. They are easy to find because they use terminology and phrases such as bad credit loans, guaranteed car loans, or guaranteed approvals. Naturally, the interest rates are higher than they are for buyers with better credit ratings than yours, but if you need a car, you should focus on the monthly payments. If you can afford the monthly payment, having a car may be worth it to you for many reasons, including searching for better employment, working more hours or getting a part-time job.

Don't be discouraged by a bad credit rating. The tips above should help you get the financing you need. Check out a site like http://www.leopardiautosales.com for more information.