Monday, September 3, 2012

Tips to Buy a Car With No Credit or Bad Credit

Hopefully, the above title of this article will not make you "shake-in-your-shoes" nor toss your hands in the air shouting: "now what do I do about transportation?" By the time you have finished reading this informative article, you may be looking to put us on your future Christmas gift list! But first, regardless of the scuttlebutt you've heard around the office water cooler, buying a car with bad credit or no credit history is a simple and easy process if you know all the tricks. We're talking about affordable used cars here, folks. Good and reasonable transportation that, in most cases, can be cars priced very cheaply. So for now, forget the wishing and hoping about the smooth looking, "pickup" red convertible with the white sidewalls.
What you may not know is that buying a cheap used car will give you a "leg up" over other car buyers who opt for the expensive vehicles, because affordable used cars can have a huge effect on the price of insurance you have to pay to drive it. More on that in a moment, but right now you need to stop getting all exercised over the fact about your Uncle Fred telling you that if your credit sucks, you can't buy a car - new or used. That is total nonsense. Once you visit a clean used car lot in your town with the ability to put up a small down payment, that dealer will be all over you like moss on a Mississippi tree stump, with paperwork in hand, ready to cut a deal. And they probably won't run a credit check either. Once you prove that you have had a job for the past 12 months, pay your bills on time, and have a bank account, you'll be in like Flynn.
All that sounds like good news and it is. But since you are a marginal credit borrower you're not going to get the best terms on whatever the dealer has to carry back, or sell to a finance company. However, the terms will most likely be a moderately high interest rate and terms of 48-60 months. But at least it's transportation, and now you can forgo that monthly bus pass you've been using.
Instead of taking a high interest loan, the best option though is to scale down on the car that you buy so that you can fully pay for it with the money that you would use as down payment. It will not be the late-model, low mileage, V8 powered model that you dreamed about but at least you will not be trapped in a deal where you owe more than the value of the car for several years.
Since all states require vehicle insurance, another nice savings beckons in your favor. Oh, sure, you could muster up enough to pay cash for the car, and eschew car insurance, but then you'll be looking in your rearview mirror most of the time, and that's not a good thing. So here is the plan. Shop around to several insurance carriers online, and look for a company who insures 10 year old or older cars. Tell the agent all you want is a high liability coverage policy (more than the state requires) and eschew collision and comprehensive coverage, as well as medical, if you already have coverage, plus towing, for sure. All this added on stuff on a 10+ year old car is a waste of money. Remember, sometimes you're the cake - sometimes you're the frosting. You want to be the cake.

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