When possible, you should always work on bringing up your credit score before buying a car. But if you need a car now, you may not have time to raise your score. Unfortunately, there are many myths out there related to obtaining financing for an auto loan when you have bad credit. If you believe any of these myths, you may worry about your ability to get a new car with bad credit. Here are three common myths surrounding bad credit and financing and the truth surrounding these myths.
You Can't Get a Car Loan With Bad Credit
One of the biggest myths out there is that you cannot qualify for a car loan with bad credit. This is simply not true. Because a car can be repossessed if you do not make your payments, many lenders will work with those who have bad credit as there is not a huge risk to them. While you may have fewer options as far as financing a loan with bad credit, as long as you make enough money to pay the car loan and have a stable job, you should be able to obtain a car loan, even with poor credit.
You Will Need a Large Down Payment With Bad Credit
Another myth surrounding bad credit car financing is that you will need a large down payment with bad credit. If you have bad credit, you may be required to put a little bit more money down than someone who has good credit. However, many dealerships are now offering down payment assistance programs to help those with bad credit get into a car. This means that the dealership kicks in a small amount to help reduce your down payment, helping get you in a car and helping them to make a sale.
You Won't Qualify For the Best Car Prices With Bad Credit
The last myth about car loans and bad credit is that you will not qualify for the best car prices with bad credit. If you have bad credit, you may have to pay a higher interest rate over the life of your loan compared to someone with great credit. But you can still negotiate the cost of the car down and work to get the best possible price for the car, even if you have bad credit.
While you may have to pay a higher interest rate if you have bad credit and need an auto loan, in many cases, you are still able to obtain a loan as long as you have stable, provable income. Talk to your bank, financial institution or auto dealerships who specialize in bad credit financing to find out about pre-qualifying for a bad credit auto loan today. Click here for more info on financing.Share