Anyone who has ever experienced the misfortune of having bad credit knows how hard it is to get a second chance from lenders especially without a co-signer. However, having bad credit does not necessarily mean you are banished to your own island, it just means you have to work ten times harder than those with good credit.
If you are someone looking to purchase a new car but you have bad credit and no co-signer, then you have already realized how hard it is for you to get approved for a loan. Some dealerships will work with you if your monthly income is to their standards while others have a special program for those with bad credit seeking to purchase a new car. However, with a little know-how you can be well on your way to driving around in your new car despite having bad credit.
First, before you begin filling out credit applications for a new car you need to decide what car best fit your budget. For example, if you are bringing home fifteen hundred dollars before taxes, don’t opt to purchase a Cadillac Escalade with monthly payments around seven hundred dollars. Ask yourself what are you willing to get and sacrifice in order to have your new car. For example, if you want a fully loaded car within the monthly payments of three hundred and fifty dollars, you may want to look around at dealerships that have fully loaded cars with your particular price range. Or you may want a compact disc in your car but can’t afford to have automatic windows; you need to decide if you are willing to sacrifice rolling down your window with the touch of a button for a compact disc. Do your research before applying for credit because you don’t want a lot of credit inquiries on your credit report.
Second, having bad credit means you are going to have to prove your ability to make on time monthly payments which means you are going to need records of financial statements. Records of financial statements simply mean pay stubs and statements from your bank. For example, if you are a freelance writer and you are paid through PayPal, you need to have a print of every transaction to and from your PayPal account. Having evidentiary support of your financial records will allow the dealership to see that you are employed and you receive monthly income. Also, remember despite having sound financial records you are going to have to put down a significant down payment–at least five thousand dollars.
Third, once you have decided on a car that fits in perfectly with your budget find a sales person you want to work with and give them a call. Notify him or her of the car you are interested in, and explain your financial situation. At some point during the conversation they are going to want you to fill out a credit application, and if you are one hundred percent positive about the car you want then I say go down to the dealership-although many dealerships have credit applications online but it is faster in person-and make sure you back up your ability to make on time payments with pay stubs and statements from your bank. The sales person job is to sale a car to make a commission; therefore, they are going to do everything they can to get you into one if your financial statements can support your ability of paying off the loan. If the dealership looks over your financial statements and are confident then you may be able to purchase a new car without a co-signer.
Overall, deciding to purchase a new car is a daunting task when you have good credit, but it is ten times harder when your credit is not in the best shape. Having bad credit should not stop you from trying to purchase a new car; however, you must be aware that it will be hard and that you will have to prove your ability to make your monthly payments with financial records. If your financial records can show you can afford the car then I see why no dealership will say no because at the end of the day, dealerships are about making money. Therefore, don’t get discouraged and keep credit inquiries to a minimum.