If you have a less than ideal credit score, you might be concerned about finding a car loan with favorable terms. Getting a car loan with bad credit can be a frustrating endeavor. Some lenders may only consider you for subprime auto loans, which often come with less favorable terms and higher monthly payments.
Don’t give up hope. You are not alone and you do have healthy options. Even if your credit score needs improvement, you can still find a car loan that doesn’t break your monthly budget. And making consistent payments towards an auto loan is an excellent way to repair your credit.
Here at Greenville Nissan, our goal is to work with you if you have credit challenges. We take the pressure and hassle of getting financed out of the car shopping process.
Here are some tips you may consider when shopping for a car with bad credit:
Know your credit score. Taking action to repair your credit score before you begin shopping can help you find a more favorable position with some lenders.
Research. It is very important to prepare as much as possible so you’re not caught off guard when the time comes to negotiate.
Research should include key terms, like Annual Percentage Rate (APR), which refers to a loan’s yearly interest rate. If you’re buying used, it also helps to know the Kelley Blue Book value of your preferred car.
Pre-qualify with banks and lenders. Even if you don’t think you can get a loan, go to your bank, go to your credit union first. One of your most powerful negotiating tools could be pre-qualifying for a loan from a bank or a credit union.
Terms Final. Make sure the terms of your loan are final. If you finance through a dealer, always make sure the terms are final before you sign. If you don’t, you may face higher monthly payments or increased down payment in the future.
Stay clear of subprime lenders. Subprime car loans might come with higher interest rates and are not likely to help you improve your credit score. Many subprime loans also use your vehicle as collateral. So if you fail to make payments, you risk losing your car altogether.
Think loan terms NOT monthly payments. Look for the most favorable terms, usually the lowest APR over the shortest period of time. That way, you’ll have more manageable monthly payments with reasonable interest rates.
Lower monthly payments may seem good on paper and are used to bait in buyers. In reality, they can lead to you paying substantially more for your car over the term of the loan. Because car loans for bad credit can come with higher APRs (Annual Percentage Interest Rates), you may end up paying a lot more than the car’s full value in the end.
Ultimately, if you are working with bad credit, it can be tougher to find the right lender/loan. The good news is that research, preparation, and negotiation can help you get approved at a much lower interest rate than expected. Find the loan that’s right for your situation. Then pay it off to improve your credit score and potentially refinance if you find better terms.
At Greenville Nissan, our finance department is dedicated to ensuring you leave our lot happy. No matter your credit score, our finance managers are ready to help you find the ideal car and finance plan for your lifestyle.
You can customize any of the new or pre-owned vehicles in our inventory – why should finance programs be any different? So whether you choose the Nissan 370Z Coupe, Altima, Armada, Frontier, JUKE, or one of our other models, our team is ready to get you the auto loan or lease deal you deserve.
We’ve made the process easy and convenient with our online credit application and monthly payment calculator. And if you’re a veteran, make sure to check out our military incentives because at Nissan, we believe that if you serve, you save.
Find out more about how our finance department can help you by contacting Greenville Nissan, North Carolina. If you live in Greenville, Winterville, Ayden, Kinston, Washington, Farmville, or Williamston area, give us a call at (252) 756-1738 or stop by our dealership at 991 Greenville Blvd. SW.
