The decision to purchase a new car over a used one should be based on more than a simple desire for the latest and greatest. It can make a lot financial sense to purchase a new vehicle. We know people who have paid frequent repair bills to keep an older vehicle running when they could have covered a monthly payment on a new car instead. Besides reliability, new cars also come with a manufacturer's warranty and the latest safety features.
A person struggling with damaged credit might be concerned about qualifying for financing on a new car. However, there are lenders that specialize in understanding the complexities of the subprime segment and will approve these loans. Care must be taken though. While a car loan meets a need, it is also a credit tool, and you want to improve your credit with this opportunity, not further damage it. This means that you must make all of your car payments on time.
Hurdles and Preparation
Before heading to the local car lot, there are steps you can take to improve your credit which may enable you to qualify for a better interest rate.
- Checking your credit reports and scores should be first on your list. Your score may not be as damaged as you thought, and you need time to see what areas you can improve and to dispute any errors.
- Paying your bills on time and reducing overall debt will make your application more appealing to a lender.
- Start saving for a down payment. While offers for little or no money down are sometimes available, it still makes the most sense to have a down payment, even for someone with perfect credit. Having an appropriate down payment will help you avoid becoming upside down on your loan.
- If your credit score is too low, you may want to consider a cosigner so that you can essentially "borrow" their good credit history and receive a better interest rate.
These tips will strengthen your application and give you the best shot at auto loan approval.
How We Can Help
When you are ready to drive a safe new car and want a lender who specializes in helping those with damaged credit, Drivers Lane is ready to help. Car buyers are welcome to begin repairing or rebuilding their credit with a new car loan today, there are even deals that require little or no money down. Get started by filling out our quick and secure application.