Get the facts before you buy a car. Buying a car is a daunting task. You’ve likely seen a great number of car commercials on TV and recall hearing phrases like “no down payment” and “APR.” Although some of the terminology may seem confusing, once you break it down, buying a car is pretty straightforward.
There is certainly a great deal of information you need to understand before you run off to your local dealership. But once you know what the acronyms mean and how financing works, you’ll be ready to get the best possible price on the car you’ve chosen.
What are some of the biggest mistakes people make when buying a new car? Not knowing your credit score. Most people know their blood pressure and cholesterol levels, but few know their own credit score. This is your report card after you get out of school and it directly controls how high an interest rate you’ll pay on your car loan.
If you try to show up at a dealership without this information you might as well take a briefcase full of cash and give it to them. The person you’re trying to negotiate with should never know more about your credit for your credit score then you. It is also quite so common that there may be errors in your credit report.
If you have bad credit, there is still hope for you buying a car. If your credit score is below 680 and you keep getting rejected, don’t submit applications everywhere that keep getting you rejected. Instead, submit one application to a bad credit auto loan resource that specializes in finding bad credit car loans for people with low credit scores through a large network of car dealers.
They take your application and can find you car financing from underwriters who specialize in high risk car loans. Usually if your credit score is 525 or above and no bankruptcies on record, you have a good change of qualifying.
You also want a try to keep your credit report fairly clean for at least six months. Look, don’t fool yourself, you will likely pay a higher APR than someone with stellar credit. However this may be the first step in helping to reestablish your credit. If you keep a good payment history you may be able to refinance the car and get a better rate.