How to Buy a Car With Poor Credit

Most people need reliable transportation for work, school and personal affairs. Some people are able to save money and pay cash for an inexpensive car. But if you don't have cash, financing an automobile is the next best thing. A good credit score can help you finance a car at a low rate. Although lenders prefer applicants with a good credit history, it's possible to get a car loan with poor credit. Knowing where to look is the key.

Instructions

1

Give the lender a down payment to help you qualify for the loan. Depending on the auto loan lender, you may need a down payment to secure a loan with poor credit. Aim for a 20 percent down payment.

2

Use a co-signer as backup. Having someone with good credit agree to co-sign your auto loan application puts the lender's mind at ease.

3

Go to a small dealership. Big dealerships may not consider your application with poor credit. On the other hand, smaller dealerships are usually prepared to help borrowers with credit problems. They offer fresh start programs and sub-prime loan programs.

4

Compare auto loan rates. One lender may take a look at your credit history and issue an 11 percent interest rate on your auto loan, whereas another lender may offer a nine percent interest rate. Shop around and speak with multiple lenders to get the best rate on a sub-prime car loan.