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How you can Buy Cars With Bad Credit

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By: Shabana Motors
on 12th Jun,2013

In today's difficult economy, it is quite easy to find yourself in debt.
How you can Buy Cars With Bad Credit

In today's difficult economy, it is quite easy to find yourself in debt. However, just what do you do if you have bad credit and need a new car? Many people think that their only alternative is to lease. Fortunately, though, this is not true. In fact, people with bad credit often get approved for car loans much easier than for auto leases.

You may even be able to get a car through a dealership. This is typically because leasing companies look at the contents of your credit report, rather than your credit score. As such, even those who have high scores may not be able to lease. So then, how exactly can you buy a car when you have bad credit?

Take a Look at Your Credit Report

Be sure to look at your credit report and check for any errors before you begin shopping for a car. Some of these mistakes can take weeks or even months to repair. With that said, try to fix any errors or problems by making regular payments to your creditors during the few months before you begin car shopping.

Save Up for Your Down Payment

Secondly, save as much money as you can for your down payment. This is essential, in that a larger down payment will mean a smaller loan, which lenders will view as less risky. Furthermore, a smaller loan means that you may pay less interest over time. It is recommended to save at least 20 percent as a down payment. If you have an old vehicle, you can use it as a trade-in towards your down payment, as well.

Talk with Your Local Credit Unions

Talk with your local credit unions before visiting a dealership. In many cases, if you are a member of a local credit union, they are much more likely to approve you for financing than a bank. Additionally, credit unions do not follow a tiered rate system. If you are approved, you will pay the same low interest rates as any other credit union member.

Think About Buying a Used Vehicle

Typically, if you have less than perfect credit, it is much easier for you to get approved for a used car than a new one. If you cannot get financing elsewhere, consider a "buy here, pay here" dealership. The main goal of an in-house financing dealership is to sell cars, so you will likely have a good chance of getting approved for financing there.

Be Prepared to Have a Cosigner

In some cases, the only way you may be able to get a car is by having a cosigner. This could be a parent or close relative who has established credit and knows your situation. However, if you do choose to go this route, be sure that you are listed as the primary borrower.

Other Things to Look Out For

These are just a few of the top things you should do if you have bad credit and want to buy a car. Other things you can do include checking today's average interest rates and costs for cars, reading all of the fine print on your contract, avoiding any add-ons or extras and checking for any penalties you may need to pay. By keeping these tips in mind, you may be able to walk in to an auto dealership and drive away with the vehicle you need for work and play.

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