Nearly seven years ago, I made one of the most extravagant purchases of my life. After a couple of years of saving money, I bought a shiny new silver sedan. This beautiful car was fitted with a luxurious custom grill. For the first several months, I constantly looked at my stunning new car through the windows of my back door. My acquisition was definitely worth the wait. I’m glad I waited to save the money needed to make a cash purchase. Now, I can enjoy my car without having to worry about monthly payments. On this blog, you will learn how to shop for the best car for your budget. Enjoy the ride!
If you want to buy a car with bad credit, it is usually not a quick nor easy process. But is it possible? It certainly is. There are some things that you need to remember when it comes to situations like this.
Be Patient and Ask Any Questions That You Have
This pretty much speaks for itself. It is also very important to stay optimistic, and never assume that you will not qualify when the process begins. Making decisions out of desperation is something that is usually a bad idea. Be strategic and ask any questions that you have before actually applying.
You should never come unprepared. Telling your story and supporting your argument is very important. All lenders usually want to be paid back on time, so it is important to always keep that in mind.
You May Have to Pay a Little Bit More
So, you have literally no credit score whatsoever? Then the lenders will usually request larger down payments, or offer higher interest rates, or even both. And even though the interest rates are usually between 10% and 20%, they actually depend on your lender and the situation that you are in. Lenders can also request more money down. It is recommended to put at least 20% down if you are a score-free borrower.
But don't let this scare you? After all, this is something that can be negotiated. If larger down payments and higher interest rates are destroying your proposed budget, you always have the option to scale down to a more basic, but less expensive car. This is probably a better solution, because committing to a multiple-year deal is just falling into a big, deep money pit. And that usually just means creating new financial risks (which are completely unwanted).
Another Option to Consider is Leasing
Because of today's lending standards, leasing can be a good option for people who are looking to buy a car with no credit score. So, what is an added benefit here? A lease is reported to your credit history, just like a car loan, and it builds your credit. Using this option will allow you to have a great credit score in a couple of months, even if you currently have no credit history at all. And you can also trade your car in a few years.
Leasing is a great option because, instead of having to take the deal as it is, you can negotiate. However, there can be some extra costs here as well.
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