By Sybria White on April 23, 2010
.jpg.aspx?width=75&height=75) A car is one of the most import assets one can have, especially in areas where public transportation is unreliable. It is likely, that a car, will be your first large purchase you will buy, besides a home. That being said, it is important to know where you stand within the car market before making this important purchase. For those with bad credit, obtaining that essential vehicle may be much more difficult than for others. This article will address what steps to take when purchasing a car if your credit is less than desirable.
Step 1: Obtain a free copy of your credit report by following the information listed with the FTC. Inspect your credit report to assess your starting point. Every time your credit report is pulled, your credit score will be affected, so knowing your starting point before entering a dealership is highly advisable.
Step 2: Do your research. It is very difficult to make a budget or any plans with out knowing some background information about vehicle prices, value, quality and safety. The objective should be to get the car that meets your financial budget without sacrificing these essentials and your personal needs. Also, keep in mind that dealerships that are tailored to buyers with poor credit, may have better financing options.
Step 3: Make a budget and stick to it! Keep in mind poor credit, implicitly makes things more expensive. For instance, you may have to pay a large down payment or have high interest rates that consumers with good standing credit won’t have to face. Don’t let these hidden costs deter you from buying your car, just keep them in mind when constructing a budget. Also remember that these financing options are not set in stone. If you are able to get a consigner to sign for you or negotiate on increasing your down payment, financing options may change. Incorporate these higher hidden costs into your budget along with the actual cost of the car. The budget, in order to be effective, must consider factors that will impact your payments. To get an idea of the value of a car look at several different websites and compare information.
Step 4: Consider your needs. Do I need a brand new car or can I manage to get a working car that can get me from point A to point B? If in a credit bind, it would be much more desirable to choose the latter. If you do, eventually, want that brand new car, then set up a plan and look to the car you get with you current credit status, as a stepping stone, an opportunity to build your credit. This is to ensure that when that day comes around, you won’t be drowning in interest rates.
Step 5: After you have done your research, it is now time to pay a visit to the dealerships best suited to your needs. Bring necessary materials, such as, reference information, your down payment and any other materials the dealership requests. You will soon have a car that meets your needs without breaking the bank.
Sources:
http://www.ehow.com/how_2098252_car-loan-bad-credit.html
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