Want to buy a car with bad credit history? Well, you are not alone. Many Americans are struggling with credit score and they still want to buy a luxurious new car. And, that is where they go wrong. There is no problem in buying a car straight out of any of the 2014 Auto Shows; but it is not the best decision for a bad credit buyer. Why buy an expensive car when used cars are perfectly capable of taking you places?
Used cars are no longer what they used to be. With the Cash for Clunkers Program of 2009, really old and decrepit cars were taken off the road. If you opt for a used one, you will probably get a car that is just six or seven years older. This means that you are buying nearly new car only.
Benefits of using a Used Car
Lower Loan Amount
Today, new cars are costlier than ever. Your dream car may cost you more than $30,000. But, you don’t need to spend such a fortune on a used car. You can get a decent car for just $12,000. You can even buy a cheaper car from a private seller by eliminating dealer’s commission.
Because of the lower loan amount, you will be able to make affordable payments easily. This will result in improvement of credit score as well. Sounds like a good deal, isn’t it?
Easy Financing Options
Most lenders do not approve new car loan requests of bad credit buyers. They worry about the safety of their money. But, lenders don’t have any problem in providing loans of smaller amounts. So, getting a loan for a used vehicle is relatively easy for a person with poor credit.
Dealing with Down Payment
A down payment or trade-in equity is required to lower the loan amount of a new car. You may even have to take a personal loan or break your savings to put money down. But, this is not suitable for a bad credit buyer. It is because he can use the same money in paying off debts and improving his credit score. You can avoid this situation by opting for comparatively cheaper used cars.
Dealing with Depreciation
Most new cars depreciate between 20%-30% of their cost as soon as you take them out of the dealer’s lot. There is no point in wasting your hard-earned money on depreciation. Instead, you can buy an old car with lower depreciation rate and almost the same reliability.
Dealing with Warranty
While buying a used car, you can easily transfer the original factory warranty to your name. Also, many manufacturers provide additional warranty on certified pre-owned cars. This way you can get a reliable car with lower cost. That’s sounds like hitting two birds with one stone!
A used car is an obvious option for a person dealing with bad credit issues. It provides the much-needed respite from crowded public transportation. And, because of affordable loan program, you actually have the opportunity of improving your credit score.
So, bad credit buyers! Stop looking for new car and make a logical decision by choosing a used vehicle.