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How Can I Buy a Car If I Have Poor Credit?

How Can I Buy a Car If I Have Poor Credit?
"""According to a consumer affairs article;

In general, it is preferable to work with a bank or an auto financing lender rather than the ""buy here, pay here"" dealership down the street. If you end up with a high interest rate on your car, work to improve your credit score so you can refinance in the future.

If you suddenly find yourself without a car, you may be wondering, ""How can I buy a car with bad credit?"" I am aware that not having a ride can present difficulties, such as getting to work or going out. See if a coworker lives nearby and offer to split the cost of gas for a ride to work. Uber is always available as a means of occasional transportation.

You should give yourself a few months to save money and pay cash for a vehicle until your credit improves to the point where you can obtain an interest rate of 6% or less. Your vehicle selection will be superior, and its total price will be substantially less.

Most people overlook car insurance as a problem when purchasing a vehicle with poor credit. Unfortunately, your insurance premiums are also based on your credit score. The monthly cost of your automobile and insurance could be problematic. Waiting until you have a good credit score will also save you money on insurance.

Here is an example based on a $35,000.00 vehicle purchase with a 20% interest rate versus a 6% interest rate on a 5-year loan.

At 20% interest, you will pay over $15,000 in interest on $35,000; at 6%, you will pay around $5,000 in interest. Quite a difference.

Your total interest expense for the vehicle is approximately $15,000.00 less, and your monthly payment is approximately $250.00 less!

Okay, let's play a little game: what if you invested the $250.00 per month that you are NOT paying in interest over the same 5-year period at a 6% rate of return?

You ultimately EARN $3,000 instead of PAYING $1,500. I'd say that's a pretty solid argument for avoiding high-interest auto loans at all costs.

Instead, devote ALL of your resources to repairing your credit. This will put you in a position to purchase with a favorable interest rate and minimal down payment. This will save you a ton of money, and you will not be disappointed!

Buying a new or even a used car is a poor investment, but one that cannot be avoided. As you can see, buying a car with poor credit is an even worse scenario. Ensure you take every precaution to avoid this costly error."""

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"How Can I Buy a Car If I Have Poor Credit?" was written by Mark under the Finance category. It has been read 117 times and generated 0 comments. The article was created on and updated on 14 January 2023.
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