The first step in the process of getting bad credit used car loans is to check your credit report and your credit score. Once you’ve done that, the next step depends on your FICO score.
Your FICO score will establish what kind of used auto loan a customer will qualify for. If your credit score is over the 640-660 range and you have an established credit history, then there’s a fairly good chance that you will qualify for conventional financing. If you have a score below 640 or your credit history is fairly new (and no co-signer), then you will probably have to finance your car with one of the bad credit used car loans available. More on that later.
First, let’s make one thing perfectly clear: buying a used car is no longer just for those customers who can’t afford or don’t qualify for a new vehicle loan. There are a number of reasons why bad credit used car loans and buying a used car makes sense:
- Depreciation – New cars depreciate anywhere from 10% to 20&% the first year and from 10%-15% the second year. Buying a two year old car will save you from 20% to 35% off the price of a comparable new model.
- Warranties – Many new cars come with full warranties that cover 5 years and up to 100,00 miles that are fully transferable to the new owner. If you buy a used car that is still under a new car warranty, you can usually save money on an extended service contract when you purchase one from the vehicle manufacturer.
- Certified Vehicles – Most manufacturers offer a certified used car program. Although prices on these cars are generally much higher than regular used cars, the peace of mind that they offer may be worth the difference in cost.
- Quality – Today’s used cars offer the highest quality in history and most are designed to last for at least 200,000 miles (with the proper maintenance).
Now, back to the bad credit used car loans. If your FICO score is below 640, you will probably need to get a subprime car loan. The good news is that there are a number of excellent bad credit used car finance web sites that specialize in helping people with credit problems get approved for bad credit new and bad credit used car loans. What’s even better is that once you’re approved, each month you make your car payment, you’re rebuilding your credit score and reestablishing your financial future.
Tags: car loan, used car financing