Buying a car is a big investment, and finding the right car at the right price is even more difficult for you have less than ideal credit. If you already have a car but have been wondering about picking up a new ride, ask yourself: What condition is my current car in now?
If you are looking for basic A to B transportation and your car runs good, it may be best to simply wait on a new car and focus on saving up money and increasing your credit score for a better interest rate in the future. Once your credit score is high and you have a large down payment, you will easily be able to get a car loan. Having a large down payment will also give you a larger equity share in the vehicle.
Every situation is different, and in some cases, you may not have the time to increase your score or save up for a down payment before buying a new car.
Costly repairs and maintenance
Some cars are less reliable than others, and some are just completely unreliable. If you have been spending significant sums of money on repairing and maintaining your car, it may be time to get a new car. Even with bad credit, spending thousands on some repairs may not even be worth it. Be sure to do research on reliable cars that fit your budget, as many brands do not meet the same quality standards as others when it comes to reliability.
Life comes along quickly. If you have experienced a large growth in your family from kids or parents moving back in, it may be time for a new car. Your significant other may also need their own transportation to and from work.
Your current car is no longer affordable
If your income has been reduced, it is possible that the car you used to be able to easily afford can become more of a financial burden. Before trading in your current car for another, see if you are able to cut your budget in some areas to be able to afford your current car payment. If you have positive equity in the car (you owe less than what its worth), you can allocate your equity stake in the car towards a down payment on a newer vehicle. If you have negative equity, there is a chance that a lender will allow you to roll over your remaining balance on your current loan to a new car.
All in all, the decision to purchase a new car is in your hands. So what should you get? If your credit is less than ideal, a brand new car may not be the right choice. A new car will carry higher interest and fees, so consider buying a used or certified pre-owned car with a short-term loan (5 years or less).
If you are in need of an auto loan and are unable to find a loan due to your score, CrediReady can help! Complete our fast, free, and secure application today and we will connect you to our database of dealers and lenders all over the country that can get you in a car that fits your needs.