Buying A Car With A Bad Credit Record
by Roy Thomsitt
People with a poor credit record are likely to have as much
need for a car as anybody with a good credit record. However,
if they want to buy a car, that bad credit blemish may make
life difficult for them.
Regardless of whether it is your own fault or not, having a
damaged credit record will affect the way your application is
received if you want to buy a car through a loan. However, it
is still possible to get a car loan, even if your credit record
is not perfect.
In fact, you will find plenty of companies offering loans for
any purpose, including car purchase, even for those people with
bad credit. As you would expect, however, the worse your credit
record is, the higher the interest rate is likely to be, and
the fewer the options you are likely to have. Much will also
depend on whether you own your own home or not. With a home
of your own, in which you have a sufficient amount of equity,
you stand a chance of getting a secured loan to buy a car. Such
a loan would undoubtedly be cheaper than an unsecured or bad
credit personal loan; however, your home would be at risk should
you default on the loan, so that is certainly something to take
As always with any spending decision when your finances are
not healthy, it makes sense to seriously consider whether you
really need a new car now, while your credit record is bad,
or if you can wait until it has been restored to normal. If
the poor record is fairly recent, that can be a bit of a long
wait in the UK, though in some states of the US that is less
of a problem.
In trying to assess if you really do need that new car, you
have to take into account the fact that it is a depreciating
asset; but then, that will apply to your new car too. What is
perhaps more important is the age of your current car and the
likelihood of extra car maintenance costs and repairs as time
goes on. This is a dilemma most of has faced at one time or
another: do we get the car repaired, and keep it going a few
more years, or do we cut our losses and sell now, or trade in.
Keeping a car going when it has seen much better days can be
throwing good money after bad, so it may be that you do need
a loan for a replacement car, regardless of your credit status.
Once you have made a decision to replace the car and to do so
by getting a loan, then it is a good time to work out your monthly
budget to ensure you are not going to slip behind with the payments
again. try to allow plenty of scope for car maintenance, servicing
and repair, as well as for fuel, road and vehicle taxes. To
help you get back your good credit rating over time, then it
is worth cutting back on your own expectations for a car; it
may make sense to get something more modest and cheaper than
you would ideally have liked.
When it is time to go out and get the actual loan, to buy the
replacement car, just make sure you shop around. It is so easy
to do online, and you will have many companies to choose from.
To keep track, it is worthwhile printing out the relevant pages
from the sites on your shortlist. Then, take the details away
from the pc and quietly go through them and compare the options.
You are more likely to take a detached view if you approach
your decision that way, rather than just staying online and
hitting the send button impulsively.
About the Author
This debt bad credit car loan article was written by Roy Thomsitt,
owner author of the Eliminate Credit Card Debt Now website: