Auto Loans with Bad Credit: Four Tips to Get You a New Car

At this point, it is not news that the current job market is tough. Too many people have lost their employment due to lay-offs in the last five years than in the decade before it and there are still whispers of more to come. Whether you are pounding the pavement looking for a new job yourself or just doing everything that you can in order to stay employed in the one you already have, you need stability when it comes to transportation. Therefore, a car is essential.If you have bad credit, the whole prospect of loan shopping is even more daunting. However, there is hope. By following these four simple tips, you can get the loan and the car you need.Tip #1: Know Your BudgetIt is important to take an honest look at your finances before talking to a lender for any reason; however there are special circumstances that you need to remember when it comes to finding a car. There is more to the purchase of an automobile than the sticker price. Once you buy that car, you need to buy fuel, pay insurance, and pay for routine maintenance such as oil changes. Therefore, the money that you will need to finance the purchase of this new car or truck is more than the amount of the loan.Before you go shopping for a new car, sit down and draw out a detailed budget that accounts for all the bills you already pay. Then, calculate how much gas you will need and how much insurance will cost (you can even call insurance companies for some basic quotes) and figure all of that into the budget. Whatever you have left over is the absolute maximum that you can pay for your car. Know this number and do not let any salesperson talk you into anything over it.Tip #2: Take Care of Your Present BillsThe number one reason that people suffer from low credit scores is due to late and missed payments on the bills they already have. Make sure you are keeping track of your monthly bills and paying each on time for at least six months. Then, when you go to the auto lender, you can show that despite your credit problems in the past you have made a conscious effort at reforming. They will appreciate your willingness to change and may be able to help you out.Tip #3: Know the Ins and Outs of Your Current CreditIn the same respect, you need to make sure that the black marks on your credit are legitimate. There is no shortage of identity theft going on today with the number of desperate people out there. This makes it essential that you ask for a free copy of your credit report and that you analyze it for any fraudulent or erroneous charges. Doing this can be the difference in getting a loan and being denied or at least getting a better interest rate.Tip #4: Look for Other MarkersA final strategy that you can use to get a good interest rate on your new auto loan is to look at a number that is an alternative to your bad FICO credit score. Many people who get into financial jams may need to stop or delay payment on bills like credit cards, but pay their auto loan. Therefore, have your lender look into your Auto Industry Option Score, which will give a different number relative to your auto repayment history alone.You Can Get an Auto LoanThe bottom line is this: getting any loan with bad credit is tough. However, by following a few simple tips you are far more likely to succeed. You can get an auto loan with bad credit if you know what to look for.