Can You Buy a Used Car With Bad Credit?

If you’re in the market for a used car, you may wonder what kind of credit score you need to get the vehicle you want. There are several factors that finance departments consider when developing your payment plan and interest rate. At AutoCenters Herculaneum, we offer a wide selection of used vehicles to choose from, so you can find one within your budget. If you’re like many drivers out there who hope to improve their score in the future but need a car now, keep reading to find out whether you can buy a used car with bad credit.

Can You Buy a Used Car With Bad Credit?

Even if you have no, low, or bad credit, the right team of finance experts should still be able to help you afford a used car. While you may not qualify for certain dealership offers, like no down payment or impressively low-interest rates, you can still leave the lot in a vehicle you love without breaking the bank. It’s important that you’re familiar with credit score ranges and what qualifies as good or bad credit to better understand your financing options.

When reviewing your credit score, consider requesting your credit reports to make sure there are no errors negatively impacting your score. The Fair Isaac Corporation (FICO) collects information from three credit bureaus to determine your score: TransUnion, Experian, and Equifax. They typically identify good, fair, and bad credit according to this scale:

• Poor credit: A score below 579.
• Fair credit: A score between 580 and 669.
• Good credit: A score between 670 and 739.
• Very Good credit: A score between 740 and 799.
• Excellent credit: A score of 800 or above.

Find a Car You Can Afford

If you have bad credit, you may have made financial commitments that were outside your budget, so it’s important to make sure you find a used car you can afford. When looking for a vehicle, it’s also essential to consider potential costs you may have to deal with in the future, including cleaning, maintenance, and insurance.

Considering these factors can help you ensure you’re making a sound financial decision and that you’ll be able to enjoy your vehicle without worrying about expenses you can’t manage. Here are some financing tips to consider to make sure you find a payment plan that’s right for you:

• Allocate funds for insurance, typically between 5 and 12% of the total cost of the car.
• Consider expenses, including title, registration fees, and sales tax, when making a budget for a used car.
• If you have a car already, consider trading it in to save on your next used vehicle.
• Try making as large of a down payment as possible to lower the amount you still owe on the vehicle and reduce your monthly payments.
• Look for a fuel-efficient vehicle to minimize your gas expenses and reduce the amount of money you spend to drive the car.

Keep Your Budget in Mind and Do Your Research

Once you’ve calculated a realistic budget for a used car, do your research to find the vehicle with the features you’re looking for within your price range. Even if you can afford payments on a luxury car, make sure to factor in additional expenses this vehicle may include, such as insurance and maintenance.

It’s also important to consider your priorities and reasons for wanting a car. For example, if you’re looking for a vehicle for the long commute to the office, consider a car with exceptional gas mileage, or steer clear of compact sedans if you need a car to support your growing family. This can help you get the most out of your new purchase and ensure that you’re buying a car you can use for the foreseeable future.

Select the Shortest Possible Loan Period

If you have bad credit and are applying for a loan to purchase a used car, selecting the shortest possible loan period is crucial. Although a longer loan period can offer you cheaper monthly payments, it’s important to remember that this increases the amount of time you’ll pay interest on your loan, which can cost you more in the long run. The sooner you can pay off your car loan, the sooner you can focus on other financial payments, improving your credit score, and reaping the benefits of an improved credit score.

Ask Someone to Cosign

When you’re looking for a used car and have bad credit, it may be a good idea to ask someone else to cosign your loan. This can help you qualify for a better interest rate, making it easier to take care of your monthly payments on time. It’s vital to remember that if you’re unable to make a payment, your co-signer will need to make it for you, so only ask someone you trust to make payments on time. You should also explain this responsibility to a potential co-signer before they agree to it.

Bring the Right Documents and Information

When you’re applying for a used car loan with bad credit, you need to bring the right documents and information to fill out your finance application. Bring two documents or pieces of mail that verify your proof of address and two forms that verify your proof of income. It’s also important to remember your government ID and your down payment for the vehicle. Give us a call at 618-621-2068 and let our team help you learn more about the application process so you can be as prepared as possible.

Meet Our Team

Here at AutoCenters Herculaneum, we know how valuable it is to work with professionals who you trust. Stop by our dealership in Herculaneum, Missouri, or reach out to speak with one of our friendly and knowledgeable sales or finance team members to discuss your options and what you’re looking for in a used vehicle. We’re happy to help and eager to get you in a car you love at a price you can afford.

Image by Clayton Cardinalli is licensed with Unsplash License