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Oops!…You Did It Again

Look, it happens to the best, richest and Britney-est of all of us… you spend, spend, overspend then you realize, Oops! … I did it again! You’ve overdrafted your bank account and now your credit is in the tank and you’re thinking “OMG! I’ll never get a car because the dealership is going to hold it against me.” But it’s okay, just like how Britney came back from her 2008 meltdown like a total boss, you too can recover from your toxic spending habits and your bad credit. Actually, chances are good that you’ll be able to find a dealership to help you secure a car loan so that you can find a reliable way to get to work, b**ch, and get your credit back on track… all without the help of a conservatorship!

But first things first – you’ve got to figure out what went wrong and why you think you won’t be able to get traditional financing for your car loan. To back up, there are a few ways to “buy” a new car:

  1. All cash – look, this is the best, smartest and typically the most financially savvy way to purchase a car. It’s also pretty unrealistic for most of us, especially those of us living paycheck-to-paycheck. However, if you have bad credit but you are able to save up some dinero, perhaps paying for a car in all cash is actually feasible for you. Lots of dealerships have cars on offer for under $10,000 and while we can’t guarantee they will will be the most exciting or gorgeous cars on the lot, we can guarantee that you’ll be happy knowing you own the car outright and that you’re not indebted to anyone (aside from all the people you already owe boatloads of money to). If you go this route, please, please do the smart thing and pay your mechanic to give the car in question a thorough once over before you sign on the dotted line. You will do yourself absolutely no favors if you drop 10K on a lemon. When it comes to buying a used car (especially a cheap used car), you can never be too overprotected.

The other thing to consider when it comes to buying a car all in cash is that you’ll miss out on the opportunity to boost your credit score. How’s that, you wonder? Well, the way it works is that if you make your loan payments on time and in full each month, that information gets reported to the credit bureaus. Just like how missing a payment detracts from your score, making on-time payments can boost your score. So if you are positive you can meet your payment obligation each month, borrowing money to pay for your car may actually help get your credit score out of the toilet.

  1. Bank Loan (or other financial institution, like a credit union) – this is the more traditional way to finance your new-to-you car purchase, but unfortunately, this may not be possible for you if your credit really is down the tubes… although really, you want to be sure that your credit is as bad as you think it is before deciding not to pursue your loan this way. Use free tools, such as Credit Karma, to check and keep track of your credit and be sure to request your annual free copy of your credit report from each of the three credit bureaus: TransUnion, Equifax, and Experian. If it turns out you are eligible for a loan through your bank – do that… you’ll most likely save a boatload on interest going through a financial institution rather than the third option, which is to finance through a dealership.
  1. Dealership Financing – Okay, so you’ve come to realize that everytime you apply for a car loan through your bank, they tell you “that’s outrageous!” You have one option left here – try to secure financing through a dealership – particularly one that specializes in bad credit car loans. Now, here’s the thing: a lot of dealers will finance people with terrible credit (or even people with no credit) because they are confident you’ll default on your payments. Do not be that person. Be the person who has to use bad credit financing because they are out of options, truly need a car to turn their life and bank account around, and then resolve to never, ever get yourself in another financial situation where you have to use risky gambles to get back on track. Bad credit financing is typically not pretty – we’re talking double digit interest rates. So if you are going to go this route, be sure you do your research and find the most respectable dealership possible. Do not just run into Crazy Eddy’s House of Cheap-Ass Cars and agree to pay crazy money for a junked out car. Do your research on the dealership, the car, and most of all – the loan. Look, you might be crazy, but you damn sure aren’t Britney Spears and I seriously doubt a judge is going to have your dad running your estate for you. If you’re going to overcome your bad credit be stronger than you were in the past, resolve to get yourself out of the financial circus you’re in, and and realize that while you may not be a girl, and not yet a woman, you do need to be an adult and take control of your own personal finances – and this means knowing exactly the terms of the deal you’re going accept and meeting those terms and financial obligations every single month.

So right now you might be thinking, whoa, I wasn’t born to make you happy, I can do what I want with my money (or lack thereof) and my credit (or lack thereof). And that’s absolutely true. But right now, you’re lucky – you’re standing at the precipice of what could be a life-changing event. You have the opportunity to turn your bad credit (and in turn, your life) around. Who knows, today you might have crappy credit and a beat up car (the non-celebrity equivalent of a  shaved head and beating up a car with an umbrella) and tomorrow you could be selling out Vegas and driving the hottest cars on the market (and auctioning off said umbrella).

Just remember, if Britney can do it, so can you. You just have to make it your prerogative.

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