Obtaining auto loan financing on bad credit is a possible nightmare. But it doesn’t have to be if you do your homework beforehand and prepare yourself. First, ask yourself if you truly, absolutely, really need a new car. If you have a car that you are still doing payments on-continue with those payments and don’t even think about trading it in. If you have a car that you have paid off, then ask yourself if you can truly afford monthly auto payments. If you can, then would you rather put those finances towards bettering your credit?
If your answer is yes, my car is paid off but it has so many problems that it costs me more than monthly payments on a new car, then go ahead and trade your old car in.
You may not have much of a choice in what sort of car you get, if your credit is truly bad. It would be financially wise to shop around for the best possible auto loan rate, and then from there choose the cars available from that particular dealership.
But wait! Back up a little bit. Before you even take your old beater to the dealership and trade it in, do a little research. Arm yourself with your true credit score, your credit history, and the Kelly Blue Book value of various cars that you may possibly get, as well as the value of your current car. Also research recent auto loan rates for your area.
Only then should you attempt to obtain auto loan financing with bad credit. It can be done-but do it smart.