Except for in the off chance you want to pay 30 percent interest. Then you just might have a fighting chance.
Instead of checking around with banks and either a) getting rejected or b) paying thousands of dollars in unnecessary interest there are smarter solutions to your problem.
Like these.
Pay in Cash
Option number one: pay in cash. A little obvious, I know, but it works.
Figure out how much you’re willing to pay for a car. (A general rule of thumb could be 10-20% of your annual take home pay, depending on your other expenses.)
So let’s say you make $50,000 a year, have very little debt, and want to spend $7k for a car and buy it within in a year.
You’re going to need to save $584 a month. You’ll also need to bargain hunt for a while to find a decent car for seven grand.
Then continue your car savings. Since you don’t have a car payment you can keep stashing away money and within a couple of years you’ll have accumulated enough cash to buy a nicer car that should last you a decade or more.
Buy From a Buy Here, Pay Here Lot
Contrary to what you might think all buy here pay here car lots are not out to get you. In fact, my boyfriend’s parents have owned a buy here pay here car lot for over fifty years. They have a huge customer base and have been wildly successful for one reason: they’re honest and fair.
Just like you would check with many traditional car lots to find a car you’d do the same with a buy here pay here lot
Ask about in house financing, down payments, monthly payments, interest rates, and other qualifications.
In the case of my boyfriend’s parents they require borrowers to put fifty percent down on a vehicle, charge a flat ten percent fee for in house financing, work with you to choose payments and terms, and offer a ten day grace period before you’re charged a late fee.
So if you bought a $5,000 car you’d be charged a total of $500 spread throughout the life of the loan. That’s it. There’s no annualized percentage rate, just the flat fee.
Not all car salesmen are fair. I think you know this. Check around with several lots before making a move.
And remember, financing through a buy here pay here lot is just like financing through a bank. If you don’t make your payments your car will get repossessed. Period.
Buying a Car with Bad Credit – It Can be Done
In either scenario you’re going to need some cash. Enough to fully pay for a car or enough to put a sizeable down payment on a car.
Start saving up now. In the end you’ll be glad that you sacrificed to put cash down on a car instead of financing at an insane rate.
Any other tips for buying a car with bad credit?
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