Bad Credit Auto Loan
If you had a bankruptcy, then you probably also have been bombarded with bad credit auto loan offers. If you are currently drowning in debt, there probably are not offers being thrown at you, but you still have options.
Bad Credit Auto Loans:
Bad credit loans require bigger down payments sometimes 20 - 50% the cost of the vehicle.
Interest rates for bad credit auto loans can also be quite high usually in the range of 5 - 26%.
How Dealers Trick You Into Paying More:
A car whose market price is $4,000, the dealer might jack up to $7,000. With a 25% annual interest rate on this car, by the time you are done paying, you have paid well over double the value of the car. Three years later, when you are done paying, what you have paid is triple or quadruple the value of the car.
Are Bad Credit Auto Loans a Good Choice:
It is not financially prudent to pay 130% to 400% the cost of your car with high interest bad credit auto loans and inflated vehicle prices by some dishonest dealers. Unless you suddenly have come into a high paying job and you are trying to rebuild your credit by proving you can now make such payments, it is not financially worth it. Financially, a bad credit auto loan is a bad investment. If you want to do a bad credit auto loan to rebuild your credit, choose the cheapest car with which you are comfortable. You are better off buying an older used vehicle that you can afford, than buying a new $40,000 vehicle that will end up costing you $52,000, and at the end of the deal is only worth $15,000.
How Can You Use a Bad Credit Auto Loan Wisely:
Check the market value for the car you want. Add a few hundred dollars to that for the dealer's fair commission. Walk out of the dealership if they are high-pressuring you with unacceptably over-priced vehicles and interest rates. Research and find the lowest interest rate you can. Don't be a push-over.
