A Step-By-Step Tutorial: How to buy a car with bad credit without it turning into a nightmare.
Are you tired of hearing the word ‘No’ when it comes to a car loan? I set up ‘How to buy a car with bad credit’ specifically so that you could hear the words ‘yes’. Who am I, you ask?used auto parts
I spent 14 years in the automobile business as a Finance Manager so I believe it’s fair to say that I know a thing or two about getting a loan financed, irregardless of your past credit history.
Remember, regardless of your past credit history, you still need a car, want a car and most of all, you deserve a car. You should also be treated with respect and given choices. I’m going to teach you how to have a choice with auto bad credit financing loan.
First of all, all lenders now purchase deals based on what is called a beacon score, which is the same as your credit score. There are three credit bureaus that make up the package. Each lender will choose whichever credit bureau(s) they prefer when looking at your credit or a combination of bureaus.
I highly advise everyone to have all three credit bureaus pulled when checking your credit and to pay for the credit score. If you only look at one bureau, you’re only seeing part of the whole picture.
With the exception of a few minor things, beacon score will play a large part in your approval. Staying within your financial means is another, so be realistic. If you make $2500 per month and have $1200 going out, don’t walk in all high-and-mighty and tell the Finance Manager that you will only have an Expedition or nothing. You’ll end up with nothing.
In order to effectively use auto bad credit financing, you are going to have to know what your credit looks like and what your credit score actually is. Otherwise, you are working in the dark.
Pay for the credit score or it’s just almost useless. With the credit score, you will know whether or not you qualify for a lender such as Ford. Also, the higher the score, the lower the interest rate. Got it? With an auto bad credit loan, the higher the beacon score, the better.
Let me explain websites like cars.com and the such: They collect applications for car loans online. They then have a network of dealerships that PAY them for the leads. These are generally dealerships that have departments that specialize in getting you financed, regardless of your credit. These departments pay for these leads, so most take them very seriously, as they are their bread-and-butter, so to speak.
If you have a lower than usual credit score, a current repo or just plain, all-around bad credit, this might be the way to go. If your credit is really that bad, remember that you are going to need some cash or a paid-for trade in that’s actually worth something.
O.K., now for the step-by-step system that I promised. First, take control of your car deal! You need to be in the driver’s seat, if at all possible. Go online and run a copy of a tri-merge, which is all three credit bureaus, plus pay for your credit score. You can get a FREE copy of your credit report once per year HERE:
This is the new Federal law that actually entitles you to receive a FREE copy of your credit bureau once per year and with some other exceptions. This is not a credit monitoring site. You have to run each bureau separately; Experian, Equifax and TransUnion. Then, you have to pay for the credit score.
So as to hold down on confusion, here’s the scoop: Each credit score for each separate bureau will be different. That’s why a Tri-Merge is called what it is called. You can run a specific bureau called a Tri-Merge from one company (there are many-just do a Google search) and you actually get one bureau (it’s actually all three combined but the credit score is also one credit score). It’s more expensive and generally runs around $34.00 but it just depends on your preference.
Now, with your credit score in hand and a copy(s) of your credit bureau, look at your credit. Do you have anything strange on there that is not yours? If so, it’s time to fix it. You should review your credit bureau at least every 6 months to a year. Plus, if your identity has been stolen, you will know quickly. P.S. you can also have a liner placed on the bottom of your bureau that simply states “Do not extend any credit on my behalf without contacting me first. Work # (111)222-3333 Home#(222)333-4444 Cell# (333)444-5555.” Call or write the credit bureaus and request that this is done. You can now do this online for free. Again, do a Google search for all three bureaus listed above.
How do you fix your credit, you ask? I give away a totally FREE book that I wrote on the subject simply for the asking. Email me with Free Credit Repair Book in the headline and I’ll email it to you.
Next in line: Know what you want to buy BEFORE you even go out shopping! Let me make this very clear. Car dealer’s jobs are to sell you a car on your very first visit. A salesman/woman and their sales manager believe that if you walk into their dealership and do not leave with a car, you will never come back again. They are going to hammer on you until they either A) Make you mad and you get up and leave or B) Sell you a car. It’s the nature of the beast. Accept it ahead of time.
What do you want to buy? Where can you get unbiased information on the auto? Again, Google for Kelley Blue Book or NADA and you can get cost, warranty repairs, recalls, and information on problems and tons of info beforehand. Limit your shopping to three models. Keep it simple. Those will be the ones that you will shop for.
Can you afford the car? You may think you can afford the car, but the bank may think otherwise! I have seen this so many times in my career. Automobile economics 101: Take your gross income (what you make per year BEFORE Uncle Sam taxes you) and remember, this income needs to be provable-tax returns, check stubs with taxes taken out or a W-2. If you are self-employed, you will need two years of tax returns with Schedule C’s. This is the income that you actually paid taxes on. Being self-employed c