What You Need to Buy a Car with Bad Credit

Buy a Car with Bad CreditTags:

If you have a poor credit score, you may think that your only option for buying a car is to buy one privately. Whether your credit history has been damaged by inability to pay loan payments, bankruptcy, or other issues, or whether you just have minimal credit history, as is the case for many young people today, you can buy a quality used car at Frank’s – despite a poor/minimal credit history.

It makes sense that a dealership would look at your credit history—before they sell you a car, they want to make sure they are actually going to be paid for that car. Traditional wisdom indicates that a low credit score is indicative of an inability to pay back loans or, at the very least, just a high risk investment for that dealership. However, a bad, damaged, or nonexistent credit history might not be the most accurate representation of your actual ability to stay current on a loan. It doesn’t have to be difficult to buy a car when you have bad credit. There is a very easy solution for individuals looking to buy a quality vehicle, even if you have terrible credit. Here’s what you need:

  1. Two recent pay stubs from your employer. If your inability to pay back loans or carrying heavy debt on your credit cards was not due simply to overspending or inattention, but rather to an inability to find work, providing recent pay stubs from an employer, acts as a proof of employment. This then means that the dealership does not have to worry about whether or not you have the income to pay back the loan.
  1. A phone bill from your residence. This provides proof of residence. When purchasing a car, the dealership will want to see that you have a permanent residence, at which you get mail, especially bills—so even if you stop by the dealership to pay your monthly bill in person, they know you have a permanent address where they can send a bill, if necessary.
  1. A valid driver’s license. Having a valid driver’s license is essential for anyone, despite their credit, who is buying a new car. Every state requires a valid license, which proves that the individual has passed a driving test, before someone can actually purchase a car. While parents might buy a car for a child who is not yet licensed, unlicensed drivers have to drive with licensed drivers.
  1. A cash down payment. While some dealership might take a check, if you have a poor or minimal credit history, a cash down payment has far less risk for the dealer. How much you will have to pay depends entirely on the car. Ten percent of the asking price is fairly standard, though paying a larger percentage may cut your interest rate or loan term.
  1. To be eighteen or older. You must be a legal adult in order to purchase a car. Most young people do not have much credit history, which is why, in the past, it was so difficult to purchase a car, unless your parents were willing to cosign with you. If you have everything else on this list and are over the age of eighteen, you can buy a car, even if you do not have a cosigner!
  1. Apply for a car loan. Whether you fill out an online credit application or contact the financing department before you arrive at the dealership, getting the loan process started early and presenting all of the information above, makes it easy to buy a great car, even if you have less than perfect credit.

It doesn’t have to be difficult to buy a car when you have bad credit. Bringing your pay stubs, phone bill, driver’s license, and a cash down payment can help offset even the worst credit. Come visit Frank’s today!