Find Used Cars for Bad Credit: How to Get a Car with Bad Credit?
A good credit history means access to find and get a used car for bad credit. On the other hand, bad credit or no credit means it will be challenging to obtain a car loan. Lenders tend to avoid people with bad credit because they consider them ‘high-risk borrowers.’
But despite these challenges, you can still access loans and buy vehicles. Bad credit auto loans are the solution for those with a poor credit history.
If you are wondering if you can get a car loan with bad credit for a used car, the information below will help. It explores finding a used car with bad or no credit. In addition, it explains auto financing options that get you on the road quickly.
Why Used Cars?
While people with poor credit scores can purchase new vehicles, some opt for used cars. Some auto lenders strictly work with used cars for people with bad credit because they offer multiple advantages. They include:
Lower auto loan amount
Bad credit auto loans for used cars usually demand a smaller amount. Used cars are more affordable than new ones. So, it would make sense that the loan amount would significantly decrease. Therefore, even with bad credit, you can find a car that fits your budget.
Lower depreciation
New cars tend to depreciate quickly in their first few years. Therefore, buying a used car means you skip the steepest part of the depreciation curve. It is advantageous if you plan to resell the car.
Warranty
You can transfer the original factory warranty to your name when you purchase a used car. In addition, some manufacturers provide a warranty for certified pre-owned cars.
These cars undergo rigorous inspections to ensure they function well and are fit for the road. It contributes to a lower car loan cost and gives you peace of mind when buying the car.
Lower down payment requirements
Taking out a bad credit auto loan requires paying a down payment for the vehicle. It shows your commitment to purchasing the car and making the monthly loan payment on time.
The minimum down payment amount often depends on the lender, but giving as much as possible is advisable to reduce the amount you owe for monthly repayment.
Because used cars are more affordable, your down payment requirements should be significantly lower. Therefore, you can contribute to the amount without taking out all your savings.
Wide selection
The used car market is vast. Therefore, purchasing a used car means accessing a wide range of models, makes, and years. The diversity increases your chances of finding a vehicle that serves your needs and preferences.
Notably, most bad credit auto loan lenders offer more options for used cars than new ones. So, if you don’t find the new vehicle you wanted, you are more likely to find it in the used car section.
Shorter loan terms
One of the ways lenders offer car loans for bad credit while mitigating risk is by providing shorter loan terms, especially on used vehicles.
It does translate to higher monthly payments, but it also means you pay off the loan faster.
If you work with a lender or dealership that reports to the credit bureaus, then on-time monthly payments could contribute to your credit score.
Easier loan approval
Most bad credit auto loan lenders are more willing to approve loans for used cars. The amount is lower than a new car, thus representing less risk for the lender. In fact, some bad credit car loan lenders strictly approve used car loans only.
Lower insurance costs
It is advisable to consider the insurance costs when purchasing a vehicle. Insurance premiums for used cars are significantly lower than those for new cars. So, if you need to save money on monthly expenses, purchasing a used car saves you some cash in insurance costs.
Budgeting for a Used Car with Bad Credit
One of the best things you can do when preparing to apply for bad credit auto loans is to create a budget.
A budget puts your funds on paper, letting you see how much of the car loan you can afford.
It also brings aspects such as maintenance, insurance, and other additional costs into light.
So before you visit credit unions, BHPH (buy-here-pay-here) dealerships, online lenders, and banks, create a realistic budget. There are four main steps to this.
Assess your financial situation
Your credit score may not be a representation of your financial situation. You may have failed to make a few payments, but you could be in a better position that allows you to contribute a monthly fee to an auto lender.
Still, it is best to assess your money situation to determine the amount you can afford for the car. Therefore, examine monthly expenses, bills, and savings.
In addition, consider the number and amount of debts you need to contribute to so that your credit score does not drop any further. This information should help determine if a car purchase is right for you.
Consider purchasing costs
Next, consider the purchasing costs of the vehicle. Most people think about the monthly payments they must make according to the interest rate.
However, before these, there are down payment costs, processing fees, and other capital you must provide before you can drive off the lot.
Therefore, as you factor in interest rates, consider how much money is available and if it is enough to get the ball rolling.
Factor in additional costs
Similarly, it is essential to consider additional costs. Even if you get the best car loans, you must factor in insurance and warranty costs. In addition, some places charge processing fees.
Similarly, if you plan to hire a professional inspector to examine the car, you must be ready for the cost. It also applies to pulling records from online sources that may charge fees for their services. Car buyers should factor in these costs, ensuring they will not struggle financially.
Set a realistic budget
Finally, you are ready to set your budget. You can set a primary budget encompassing all costs you will take on immediately and in the future. Under this, you can separate costs, setting individual budgets for them.
If you have a flexible income, give yourself a range rather than a fixed amount. It will give you access to more choices and the flexibility of additional services.
With your budget ready, you can explore auto loan providers, check out the average interest rate for people with your credit score, and start shopping for a car.
Financing Options for Bad Credit Auto Loans
The following are the best financing options for bad credit used car buyers:
Traditional Lenders
Some traditional lenders offer bad credit auto loans to purchase used cars. If you associate with a bank or credit union, they may be willing to give you a personal loan or other types of financing despite bad credit. Some traditional lenders even work with dealers who offer used cars to people with bad credit.
Subprime Lenders
Subprime auto lenders work specifically with car buyers with bad credit. Their interest rates are higher to compensate for risk. However, good subprime lenders such as Auto Credit Express keep the rate favorable for the bad credit market.
Buy Here, Pay Here Dealerships
Buy here, pay here dealerships are the best financing lenders for this situation. You get access to a bad credit auto loan and shop for the vehicle under the same roof.
These dealerships are popular for working with buyers with bad or no credit history. Good BHPH dealerships, such as Titan Auto Group, offer a range of used cars and favorable interest rates.
Online Lenders
Online lenders are another financing option for people with bad credit looking for used cars. Online lenders’ loans are often fast, with some going through within the same day as the application.
Researching Reliable Used Cars
Just because you opt for a bad credit car loan to purchase a used car does not mean you should settle for any vehicle.
The goal is to purchase a good used vehicle that meets your needs and desired qualities. And because you are taking out a car loan, the vehcile should perform well and last for a long time.
Many people make the mistake of picking any car because they think that having bad credit means no options. However, legitimate buy-here-pay-here dealerships offer high-quality used vehicles.
The same applies to banks, credit unions, and other lenders working with a network of dealerships. Learn below how to select a used car for your bad credit loan.
How To Choose a Used Car with Bad Credit
The following are tips on choosing used cars for bad credit car loans:
Choose a reliable brand
If you are buying a used car, ensure the brand has a track record of reliability. Therefore, research all the car brands you would be interested in purchasing.
Check online reviews and car-related forums for information on how long these brands last, their maintenance needs, and the average repairs they need over a few years.
This way, you can be sure that your car loan goes into a brand that will give you the easiest time over the years.
Research the market value
Before purchasing any vehicle, you must ensure that the dealership offers the best price. You must visit the dealership with a ballpark estimate of the car’s value.
Go online to reputable websites with tools to help you get estimates for the value of any car. Ensure you have enough details about the car, including make, model, year, and mileage.
The estimated value should be the starting point in the negotiation. You are on to a good deal if the sale price is close to the estimate.
Consider CPO vehicles
Certified Pre-Owned vehicles, or CPOs, are the best used cars you could get with bad auto loans. These vehicles go through a thorough inspection to ensure they are in good condition and have all routine maintenance sorted.
CPO programs offer excellent warranties; some coverages can even exceed those of new cars of the same brand. Getting a CPO car is making great use of a bad credit auto loan.
Inspect the vehicle
When you get the chance to get a closer look at the car, become a car inspector. If you get a loan with bad credit, the money should go to a car with no hidden issues that could tank your investment in a few years.
Start by checking for rust. Although it is rare, rust still occurs. So get on your knees and check the underbody with a flashlight.
Additionally, inspect areas such as the lower door, fender, hatch area, and areas with paint bubbles that may indicate water damage.
Furthermore, always check for leaks under the car that could indicate the need for engine or transmission service.
Ask questions
All car buyers should ask a few questions about the vehicle. Poor or no credit scores should not limit these questions either. Ask a variety of questions, such as:
How many people have owned the car?
Does the vehicle have a clean title?
Where did the vehicle come from?
Do you have maintenance records for the car?
Does the car have a spare tire and jacking tools?
Does the car have the owner’s manual?
How many keys does the vehicle come with?
Questions like these ensure you spend your car loan on a vehicle that will last. Go the extra mile to pay for services that check title status to ensure the car has a clean title.
Knowing where the vehicle comes from will inform you of potential dangers the environment may have triggered. For example, areas with humid, salty climates can produce used cars that are prone to rusting.
Test drive, if possible
There is a lot of conflicting information on whether people with a bad credit history can test-drive vehicles before purchasing.
However, it is important to ask and even insist before purchasing the vehicle.
If you have proof of bad credit auto loan offers or approval, use them to show the salesperson that you are committed to purchasing a vehicle.
Leave the stereo system off during the test drive and listen to the car. Drive at low and highway speeds. In addition, go down a rough road listening for squeaks or rattles.
Stay alert for foul odors that may indicate damage to the engine, exhaust leaks, or mold. Ensure that you drive in a straight line for some time to see if the vehicle gives off an angle. It could indicate suspension damage.
Finally, check the tires for uneven wear.
Ask for the car history
Even with a poor credit score, buyers can ask for the car history to learn more about the vehicle. You can order a car repair history online if you have the license plate number and VIN.
A pattern of well-placed repairs can indicate a well-maintained car. On the other hand, if you notice frequent repairs, especially for the same malfunction, it could indicate a serious problem that will make owning the car challenging.
Where to Find The Best Used Cars
Finding the best used car to purchase with bad credit can be challenging but rewarding. But if you are looking in the right places, you should save time and find a legitimate seller with a good deal. The following are some places to consider for the best used cars if you have bad credit:
BHPH Dealerships
These kinds of dealerships not only sell used cars but also finance them. Going to a BHPH dealership is killing two birds with one stone.
Best of all, good BHPH dealerships offer more flexible approval criteria for bad credit, making them a great option for purchasing a used car. Most BHPH dealers strictly work with used cars, so you will find various options.
Online Marketplaces
Various websites have an extensive listing of used cars. They can come from dealerships or private sellers, making them ideal for people with bad credit.
However, among the legitimate online marketplaces are scammers, so you must ensure they are reputable websites. Online forums can help you find a legit online marketplace for used cars.
Auction Houses
Some auction houses hold regular auctions, selling off used vehicles. These auctions are usually public, and the sellers rarely have an issue with bad credit buyers.
However, purchasing a used car from an auction requires thorough inspections since some may be risky. However, such places offer affordable options, so it is worth checking, especially if you get rejected for an auto loan.
Government Auctions
Occasionally, government agencies sell off surplus vehicles and impounded cars through auctions. They are rare but can often lead to good deals and vehicles.
But like any other auction, you must ensure the vehicle is in good condition. Therefore, research is crucial. Consider going with an expert if you do not know much about cars.
Post-Purchase Tips
Once you get the loan and purchase the vehicle, there are several practices you should adopt to contribute to a smooth ownership experience until you finish paying off the loan. Consider the following:
Making timely payments to rebuild credit.
Ensure that you make timely monthly payments. Late and skipped payments will not reflect well on your credit score. However, making timely and correct payments could help improve your credit score, primarily if your lender reports to the major credit bureaus.
Staying on top of maintenance and repairs
Always keep up with maintenance and repairs for the vehicle. Buying a high-quality used car will last long, and maintenance can help.
Protect your asset by keeping up with regular maintenance. Avoid procrastinating repairs as they cause more damage over time. In the long run, these practices make your car worth a reasonable price when reselling.
And even if you are not planning to resell, these practices ensure the car serves your needs efficiently over a prolonged period.
No Limits With Bad Credit: Get A Used Car Today!
Can you find a car with bad credit? Yes, and it is rewarding! Used cars offer multiple advantages for bad credit buyers, including lower amounts, insurance costs, and easier approval. It is a practical option for people with financial restraints.
If you choose this option, ensure that you inspect the vehicle and take it out for a test drive before purchasing. When you finally get the car, keep up with maintenance and repair needs to ensure the vehicle serves you well.
Most importantly, always purchase from reliable dealers and work with lenders that offer favorable interest rates and flexibility.
Titan Auto Group offers high-quality used cars and flexible bad credit auto loans. Get in touch today to find your dream used car; no credit required!
