Car Buyer Labs

Car Buying Advice, Tips and Reviews

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How to Work with Bad Credit Car Dealerships

Having bad credit doesn’t mean that you can never purchase a car. If you’ve been searching for bad credit car dealerships and getting discouraged because of your current rating—take a moment to relax. There is hope. You can work with bad credit car dealerships to help you get into the right vehicle that matches all the criteria on your dream car wish list and you can even find online dealership alternatives. You can work with these dealerships and alternatives by following these tips to help with the process.

1. Alternative Dealerships

One way to purchase a vehicle when you have a bad credit score is to go to an online dealership that offers guaranteed credit approval. The best alternative dealerships online have innovative programs that help you to save time and money. Both of those are precious commodities that you don’t want to waste. Look for an online dealership that offers great benefits like a lifetime mechanical warranty at no charge to you, customer referral program, clean vehicle history report, money back guarantee for the first 3 days or 300 miles, and a user-friendly online payment portal.

2. Know Your Credit Score

Checking your credit score can be a scary experience. However, it doesn’t have to be when you realize that there are dealership alternatives that are willing to work with you to get you into a vehicle so you can live your daily life and work hard to rebuild your financial freedom with an improved credit score. It is important to find out your credit score before you start the car buying process so you will be better prepared for the type of interest rate you’ll get. You may not be able to avoid paying a higher rate when you have a bad credit rating. However, that bad score will not ruin your chances for buying a vehicle when you learn how to become a savvy consumer and effectively work with bad credit car dealerships alternatives. You can check your credit score online for free on sites like CreditKarma.com and CreditSesame.com.

3. Make an Informed Decision

Once you know your credit rating, you need to decide whether or not you want to work to improve your score before starting the car buying process. You can take some time to pay off a few more debts and work to improve your score before trying to pre-qualify for a car loan. However, buying a vehicle may be more of an urgent need. If that’s the case, you should diligently research the best bad credit car dealership alternatives and find the right one for you.

4. Start the Search

With a credit score that is under 500–600, you may have considered working with bad credit car dealerships. However, there are more involved alternatives in this search than simply finding a dealership that will give you a car loan. You need to find the best deal that is right for your current financial situation. This may require hard work on your part. You may have to check out several dealerships or alternatives before you find the right one that will give you the lowest possible interest rate for your specific credit rating and the one that offers the best customer benefits.

5. Pre-Qualification Process

When searching for the ideal vehicle that you can afford with your bad credit, you should be prepared for going through the pre-qualifying process for the loan. You may have to go through this process at several dealerships or alternatives before finding the right one that offers you a loan. You can make the process easier for yourself by choosing to work with an alternative online dealership. You can go through the pre-qualification process in your own home and don’t have to go down to several different traditional car dealership locations.

6. The Buying-Online Difference

Couple buying online at a bad credit car dealership

Sometimes in life taking the alternate route is much better than you expected. You never started out on the journey thinking you’d take this alternative path. However, it ended up being the best decision you made. The buying-online difference is a great choice for people who have bad credit and don’t want to try different dealerships only to get rejected or end up paying an extremely high interest rate.

When you choose to buy your car online, you can benefit from great customer perks like the following:

Easy Pre-Qualification System – Imagine going online while sitting in the comfort of your own home to try to get pre-qualified for a vehicle loan. You’ll get instant answers and can make an informed decision. Remember to look for alternative dealerships online that offer pre-qualification without any obligation to finance or purchase from them. You don’t want to sign your life away just because you filled out a pre-qualification form online. You are only trying to get financial information so you can decide your next step.

Personalized Pre-Qualified Payments – Going the alternative route online will give you opportunities to find out what your car payment estimate is so you can shop more easily for the right vehicle. It’s like having a personal shopper helping you choose from an expansive inventory and guide you through the process.

Identify Your Car’s Trade-in Value – When shopping for a new or used car, you may be a customer who has a vehicle that needs to be traded in. Working with an online dealership often gives you the chance to ascertain the trade-in valuation. This will definitely help you make an informed decision on whether or not you want to continue with the financing process.

Calculate the Estimated Payment – Look for an online dealership that has a payment calculator on their site. Based on the interest rate that applies to your credit score, you can calculate your estimated monthly payment. This information is extremely important for making your final decision to proceed with financing.

7. Save Money Where You Can

Since you will have a higher interest rate due to your credit rating and a higher monthly payment, you need to make smart decisions to save money where you can. If you think that you can pay the car off quickly, choose a shorter three-year loan with a lower interest rate instead of a longer five-year loan that has a higher rate. Don’t get sucked into the vortex of adding on all these special costs like paint protection or rust-proofing, if you know you cannot afford it. You need to be sure you’ll be able to make consistent, on-time payments to improve your credit score. Take your time to find the best deal for you that offers the lowest interest rate. If you can make extra payments, that is great because you will end up saving on interest in the long run. Always be cognizant of the total cost of the loan and how much you’ll be paying each month. Don’t forget about the additional expenses like the monthly fuel costs, regular oil changes, and saving for future repairs.

Search for the bad credit car dealerships near you that are ready and able to help you get in to the car of your dreams that fits your budget, and if none of them are up to your standards check out an online alternative and see what they can offer. You don’t have to let bad credit wipe out any chances of ever buying a new or used vehicle. Always remember to check out alternative dealerships online that offer great benefits for buying a vehicle with them—even when you have bad credit.

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