Shopping for a Used Car When You Have Bad Credit
Assuming you don't have a home office or live within walking distance to your place of employment, few things in life can feel as defeating as wondering how you're going to get to work. And, living in a four-season state like Wisconsin, where weather can often be unpredictable, often complicates things even further. Not having reliable transportation can mean the difference between getting the job (or getting the kids to school, or being able to access medical attention) and...not.
In today's post, we want to discuss not only how to buy a used car in Wisconsin with bad credit, but also how to use your car loan as a tool to help rebuild your financial reputation, and restore the trust of lenders.
Learn How to Assess Your Finances
Before you even step onto a car lot, the most important thing you can do to strengthen your chances of getting a car loan is to know your personal finances inside and out. Knowing basic things like your incoming cash and outgoing expenses, as well as your credit score, can help you put together a reasonable outlook of what kind of car you should expect to be able to afford. For better or worse, the fact remains in America that if you have poor, bad, or subprime credit, lenders consider you a risky financial bet, and often will refuse to finance you for a loan. If your cash flow is low, and your expenditures are high, consider how you can swap that scenario. Are there monthly costs you can cut down on, like cable, cellphone plans, or dining out? Are there odd jobs you can make extra income off of? Until you begin to do some basic financial housekeeping, it will be tricky to get most good lenders to take a second chance on you. We also highly recommend that you monitor your credit score. In fact, you're even entitled to a free credit report, and can read more about how to get your free credit report here.
Consider What the Car Will Be Used For
Do you need a truck to haul large equipment? Or will a reliable, and more affordable sedan do the trick? Do you have young children, and wish to find a car tthat prioritizes safety over flash? Knowing what your actual needs are, instead of what your ideal car is, will make you seem like a more responsible borrorower--and it will also keep you from financing a car you ultimately can't afford to own. At Easton Motors, we've seen many of our former guests turn to large dealerships, only to see the vehicle of their dreams be repossessed by the bank. By maturely assessing your situation and buying what's appropriate for your needs, you guard yourself against facing a similar fate.
Finding a Wisconsin Dealership
At this point, most of us don't even buy toilet paper without first consulting Google (or Bing, or Yahoo!). But when it comes to searching for a place to buy a used car with bad credit in Wisconsin, things can get a little dicey. By researching dealers who specialize in bad credit financing, you can save yourself a lot of hassle, and perhaps even future heartache (we're looking at you, repossessed crew cab). Here are a few things to look for in Wisconsin when shopping for a used car with bad credit.
1. How long has the dealership been in business? Knowing that a dealer has been around for a good while is important to know when it comes time to examining their warranty program. A dealership who hasn't been around for long, or has a shaky past, might not be around long enough to honor their warranty commitments.
2. Does the dealership report your good repayment behavior? We've written about this before, but never take out a loan (especially if you're trying to rebuild your credit) from a financial instutition that doesn't report your good loan repayment behavior. One of the major benefits of buying a used car from a certified dealer, instead of from Craigslist or from your neighbor, is that lending institutions have the burden of reporting your payment behavior to the major credit bureaus. If you buy a car with cash, there's nothing to report, and you miss out on being able to use your loan to benefit your overall credit profile.
3. Can they offer a nuanced inventory? Maybe you can't afford a Ford F-150 right now, but what about in a year or two, when it's possible to trade up into a different vehicle? Does the Buy Here Pay Here lot or bad credit dealer you're working with have the sort of inventory you want to grow into?
As you continue to chart your finances in anticipation of buying a used car despite bad credit, be sure to do your research, be realistic about your finances, and pick something that will help you plan for your future without compromising your present situation.