Loving a car is American legacy! We are born with this amazing passion and love for cars. If you are looking to fulfill your dream of owning a brand new BMW, Audi or a Chevy, you need to take help of auto loans. Now, when it comes to new car loans, one thing that terrifies us is bad credit history. But, rejection because of bad credit history will become history now! Think out of the box when it comes to bad credit score. Read this amazing new car loans guide to stay focused on the road of car buying.
New Car Loans for buying a New Automobile - Why is it necessary?
A new car costs more than $30,000 and prices have been steadily rising. Now, to buy a new automobile, you have to cough up almost $3000 extra. This means car loans have become a necessity.
Everyone wants a Piece of Pie
New lenders and online automobile financing companies have made the auto financing world competitive. Everyone wants a share of customer's spending. This means it has become very easy to get approved for a new car loan.
It's so much easier to get a bad credit auto loan today than it was in the past. Bad credit history is certainly not an issue for lenders now. Here's how you can easily sign the new car loan contract despite bad credit history.
Tips for a New Car Loan with Bad Credit
1. Begin with Budget
We all know how addictive cars can be! So, it's better to know your spending capacity before choosing your dream car. Calculate your income and expenses before deciding on the kind of car you want. It will avoid any further damage to your credit score.
2. Income Proof
Even if you have bad credit on your credit report, it's important to earn a decent income. A good income ensures regular payments. This is very important for lenders who offer auto financing options to bad credit buyers.
Your income proof can be your recent pay-stubs. A self-employed individual can provide IT statement as a validation of regular income.
3. No Down Payment? NO PROBLEM
Don't worry if making a down payment is difficult for you. There is absolutely no need of making a cash down payment. You can trade-in your old car. Its value will be deducted from the cost of your new car and voila! Your Problem is solved.
Most car manufacturers offer rebates in the name of customer incentive. You can ask the dealer to use rebates as down payment. This means you will actually put money down without taking a single dollar out of your pocket.
4. Options other than the USUAL
Most bad credit car buyers are suggested to opt for shorter loan terms with higher monthly payments. It becomes slightly impossible to make regular monthly payments of more than $500. This increases the chances of missing out on payments. So, think creative and understand innovative options that are available in the market before signing on the dotted line. It's better to explore all choices so that you choose the payment schedule that fits you the best.
You can choose balloon payments. With this option, you can make lower monthly payments and then, make a huge payment at the end of the loan term. This can be ideal if you plan for the last payment from the very beginning. Along with an affordable monthly payment, you can put aside some money for the last payment. This will help you avoid higher payments.
According to Wall Street Journal, the average car loan term was 65 months in last few months of 2012. Nowadays, loan terms are as long as 70 months. Today, lenders are looking forward to extend loan term of 97 months. This is because most car buyers are unable to afford high monthly payments. As the durability of cars is increasing every year, they can be used for longer periods. This makes such longer terms a reality.
So, while opting for a new car loan with bad credit history, remember to try out other options. Seek knowledge about the current trends in the auto financing market because it will help you grab the best car loan deal.
All the best for your new car!
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