Having bad credit makes it nearly impossible to live any semblance of a normal life. It’s hard to get a mortgage, banks don’t want to touch you, and if you need to get a bad credit auto loan, you can expect to pay upwards of 10-15% APR, which is insane when you consider that many auto owners, those with good credit that is, can get 0% APR loans.
That being said, if you are dead set in buying a car with bad credit and or need new transportation, then there isn’t much you can do besides trying to get a good deal on a loan.
The best way to get bad credit auto loans that won’t kill you is to shop around. There are many places, such as Capital One and HSBC, which offer decent deals for new and used cars. Also, if you have a good reputation at your small bank or credit union, then they might be willing to give bad credit auto loans provided that you put some money down.
If you are in the military and have bad credit, then you shouldn’t have a problem, as many car dealers offer special programs for military members.
Another great way to get bad credit auto loans, if you can swing it, is to have a co-signer with good credit. This can be a friend or family member willing to co-sign and put their name on the bank note. Of course, if you don’t pay, then they’ll get hit too, but if you get a loan in this manner and pay it on time, then you should have a much easier time getting an auto loan in the future.
If you’re still having trouble, you can always try a corner lot dealer with a buy here pay here financing option, but I would only use them as a last resort, as many times they offer ridiculous rates and charge penalties for paying your loan early.
Once you have a loan in place, if the rate is above 10%, then wait about 6-12 months and look to refinance at a lower rate. You should be able to shave at least a few points off the rate, but just make sure that you don’t add more time to the loan, as this will cost you more than the few percentage points you’re already paying.