It’s an all-too-common situation these days: the need to own a car and having a very poor credit score. And, it is also a very challenging situation if it happens to you. That is because, unless you have the cash on hand to pay for your car in full, you are going to need auto financing.
Automobile financing has been around almost as long as automobiles have. Since the time that cars were invented, most people have not had enough savings to just buy a car outright with cash. In fact, apart from home purchases, buying a car is the single largest purchase most people will make in their lifetimes.

So, that puts things into perspective: this is important stuff. Unfortunately, many people with very poor credit who have been struggling to get approved for an auto loan focus only on one thing: getting approved. They tend to forget that they have a lot of options in terms of getting a loan, and overlooking this could get them into a loan that is not right for them.

Given the large number of variables (e.g., interest rate, payback period, auto purchase price, amount of down payment, lender reputation, etc.), differences in the loan terms of the various auto loan offers you are considering can have a huge impact on your finances down the road depending upon which you choose.

The point is: when looking for car financing with very poor credit, make sure you focus your attention not only on getting approved for a loan, but also on getting the best-possible terms on the loan for which you are applying. Remember that you have a lot of options in choosing the right financing, and options equal power. Here are 5 tips that can help:

1. Choose A Car At A Reasonable Price Point

When you have a very poor credit score, it is important to stack the chips of getting approved for an auto loan in your favor. For one, this means choosing a lower-priced automobile than might be your ideal. Maybe select a more basic model with fewer frills and features. The lower price will bring down the amount you have to borrow, which will mean a better chance for loan approval.

2. Save As Much Money As Possible For Down Payment

If you can, put off your automobile purchase for a couple more months in order to save up more money for a down payment. The more you are able to put down, the less you will have to borrow.

3. Negotiate With Multiple Vendors

As always, having more options is much better than having fewer options. Often, people who have trouble getting approved for a loan due to a low credit score will find themselves jumping on the first offer than comes along. This is a big no-no! Instead, have the patience to check out the offers from a few lenders before selecting a particular loan offer.

4. Know Your Interest Rate Range

After getting one or two offers, you will start to get a sense of what type of interest rates for which you will be eligible. Given your poor credit score, you will likely not be eligible for the best-possible interest rate that the lender is authorized to offer clients who have excellent or good credit. Still, there is definitely a range of interest rates available to you, and you are going to want to negotiate for the lowest-possible rate in that range.

5. Work To Raise Your Credit Score

If you are deciding to wait a while and save up some more money for your automobile purchase, you may as well work on raising your credit score. There are surprisingly easy ways to do this. For starters, you should obtain a free credit report (which you are entitled to by law at least once per year) and protest any glitches or black marks against you that seem to be errors and/or are fraudulent. A higher credit score can make you eligible for a much better interest rate.

When looking for car financing with very poor credit, it is important not to sell yourself short in terms of the possibilities available to you. Do what it takes to become eligible for a loan, but also make sure you negotiate the best-possible loan deal for yourself. You will save yourself thousands in the process.

Author Bio: Get access to more tips for car financing with very poor credit at: www.Best-Car-Financing-Deals.com.

Category: Finances
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