| Not everybody has good credit. This should not | | | | - Often dealers use what is called a "captive" |
| be news. But what may be news to people with | | | | financing company (meaning it is owned and run |
| less than stellar credit is that they don't have to | | | | by the auto manufacturer), and they need your |
| settle for abuse when financing a car with bad | | | | business. You are not really in complete control, |
| credit. They just have to be aware of the | | | | but you do not have to feel like you're begging |
| different set of circumstances that is likely to | | | | either. |
| apply to their situation. | | | | - Research the price of the car before you buy. |
| If you're going to finance a car, even if you have | | | | Do not settle for a 50-100% sticker markup |
| good credit, it is often wiser to get a car loan | | | | because you think that is what you have to |
| from a bank. That can give you cash in hand | | | | stomach due to your bad credit. Find the real |
| when you walk into the dealer, which often can | | | | price, then add $200-600 for dealer profit. |
| get a better deal on the vehicle (the dealer does | | | | - Be prepared to offer a solid down payment. If |
| not want to let a cash buyer walk away). | | | | you can't put any money down at all, you will find |
| Unfortunately, if you have bad credit some banks | | | | yourself abused by financing companies, including |
| will not lend you money for a car. Credit markets | | | | dealers. If you can offer a larger down payment, |
| are tight these days after the subprime blowup, | | | | you'll be a more attractive prospect...but don't |
| and banks are getting a bit pickier. That means | | | | forget that advice about not paying too much. |
| you might be forced to finance through a dealer. | | | | - Consider dealer networks. These are what they |
| This is where the potential for abuse comes in. | | | | sound like-networks of dealers. They compete for |
| Some dealers will jack up the price of a car for | | | | business, much like the members of a financial |
| borrowers with bad credit. This is often the case | | | | network like LendingTree do. If you have bad |
| with dealers who say they specialize in helping bad | | | | credit, submitting your information online to a |
| credit borrowers. They might also add on extra | | | | dealer network might produce several dealer |
| "features" to your purchase price, like credit | | | | options for you. |
| insurance. Their tactics are not necessarily a | | | | In a nutshell, financing with bad credit does not |
| scam, but ignorance of what they're doing can | | | | have to be fraught with danger. You do not have |
| cost you. | | | | to settle for abuse just because your credit is not |
| The best defense is knowledge. Here are some | | | | perfect. But you do have to be smart to keep |
| things to keep in mind if you finance through a | | | | yourself from being raked over the coals. |
| dealer: | | | | |