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Buying a Car with Bad Credit


Human life is full of needs and luxuries and one of them is a car. For some people, it comes under needs while for others it comes in luxuries. You can buy a new car or go for a used car. But keep in mind that used car that you are looking might encounter a car accident. You can easily buy a car on the full payment and on credit. But as not everyone has so much cash in his/her hand that he could buy car immediately on cash. If for some, reasons you may have full amount, still you prefer to buy a car on credit because you may not expense all your money at once. Here the concept of buying a car on credit comes into play effectively. But what happens is when you have a bad credit rating.

In many countries, records are maintained against each individual about his/her borrowing history, late payments and bankruptcy. If your credit score is bad, then this would create a major problem for you because bank or financial institutions will not lease you the car.

However, if you pay a little attention and address the problems that may cause your application to be rejected for a car, you may buy a car with bad credit. Following guide will help you a lot in this regard:

Obtain your credit report and credit score

You can get these from credit reporting agencies. Currently there are three agencies which are providing this service which are Equifax, Experian and TransUnion. Credit report entails detailed record of your past loans, past payments, late payment. If there are very few late payments, then this would not be a big problem and won’t let the dealer rejecting your application. As far as Credit Score (also called FICO Score) is concerned, it should be within the range of 680 to 700. A FICO Score below 640 is tagged as subprime while score 500 or below is mostly rejected for leases and loan disbursement. After getting to know these details, you should call various dealerships and discuss the matter with their representatives. This will save a lot of time of visiting various offices and at the same time, you will come to know the dealers that are willing to offer you a car on bad credit. You will get suggestions from them as well.

Subprime Credit Score

If FICO score is below 640 but above 500 (called Subprime), you may be accepted by various dealers. However, they will take a higher interest rate and higher down payment. Again, you should call various dealers and hopefully you will negotiate a better interest rate and down payment because of the competition in the dealership market. Remember, dealers are sitting in the market to sell the cars and you should negotiate the payments terms with them with confidence. You will definitely get a suitable solution.

Wait and Apply

If your credit score is not good and no one is entertaining you, then you may wait 6 months or more and try to clear any non-payment issues. This will make your credit score well and off course will help you a lot to buy a car.

Find a Cosigner

Cosigner is a person who has good credit score and on your behalf he/she takes responsibilities of your payments. However, it would be difficult to get a cosigner, but you may search one by giving some benefits to cosigner.


Please keep in mind when you are applying for buying a car, do not apply at more than one place. This also affects your credit score and may lower down it. Also, always try to find dealers who are experts in dealing and providing to bad credit score clients. This will achieve your objective to buy a car with bad credit easily.

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