You need a car and have done your homework to find one that will fit your budget. But you also know your credit is not so great. Should you give up the notion you can get a vehicle loan? Not necessarily.

There are many people across the country who have been experiencing hard financial times and bad credit issues. Educating yourself about what options you have available to you for your vehicle financing needs is the first step in getting a loan despite your bad credit. The pitfall those with less than perfect credit fall into is that they are so happy to get approved for the financing, they rarely stop to think or care about the terms and conditions of the loan they did get. Instead of falling into the same trap, here are some tips that will help to ensure you get the best deal for you and your financial situation.

Check In With Your Credit
While you may have an inkling of what state your credit score is in, make sure you confirm just where you stand. If you currently have a credit score under 500, you might want to postpone shopping for a car for the time being and focus on getting your credit score up. You can also start saving more cash to pay for the car outright because with such a low score, you could end up paying a very high interest rate (think close to 30%), which in the end will definitely cost you way more than you can afford.

Check Your Income
Since you are allowed to dedicate only 20% of your income toward a monthly car payment, review the amount of money your bring home per month and make sure it is at least $1200 a month.

First Time Buyer Incentives
Check with your local dealerships or online site to find programs that offer incentives to first-time buyers. With proper research before walking into a dealership, you will be better prepared to know what you can get and prevent the salesman from telling you otherwise.

Ask for Help
If you know your credit is not great, you may be able to find better financing if you find a willing co-signer to help you on the application. A co-signer with great credit can help your chances but keep in mind that being a co-signer on a loan (or having one) is a big responsibility and can be a sure-fire way to ruin good family relationships or friendships if you don’t live up to your end of the deal by skipping out or being late with payments, essentially single-handedly ruining the other persons credit.

Timing Counts
If you have improved your credit score past 500, found a co-signer, or otherwise improved your financial situation and are ready to make a deal, visit the car dealership at the end of the month, when incentives may be better. Car salesman might be more flexible to close a deal at the end of the month because commission is so close to coming in. The dealership’s finance department may also be more willing to bargain so they in turn can end their month on a high note.



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