A Guide To Financing A New Car Even With Poor Credit

new luxury cars in a line
Alyssa Guznik
March 1, 2023

#1 Come with a down payment

Having savings set aside right now is tough, but having even a thousand dollars to put down can help lower monthly payments and interest rates. If your current vehicle is paid off, a trade-in can also work as a down payment.

#2 Consider a cosigner

A bank wants proof that whoever they’re lending to can afford to pay them back. Having a decent credit cosigner can make the difference between getting a loan with a decent rate and not getting approved for a new car at all.

#3 Work with your financial institution

Already have a relationship with a bank or credit union? Perfect. Often, they’ll be more likely to approve the loans of their members, sometimes even offering a lower interest rate.

#4 Shop around

This applies to vehicles, dealerships, and loan providers. Shopping around allows you to find the best dealerships, lowest prices, and car loan options for your credit. Companies like Capital One, Carvana, and Lending Tree even have special rates on specific cars.

Financing a vehicle with poor credit can be the gateway to building better credit in the long term. The industry can be a manipulative minefield when it comes to pricing and loans - especially for us. Being well-armed with the correct information can help us use the system for our goals.

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