4 Financial Planning Tips While Buying Bad Credit Used Cars
New or used, cars command a considerable investment. Although necessary, it is an addition to your existing fixed costs among all your monthly expenses. Careful financial planning is naturally a logical step before taking the final call but not always do you possess the expertise required to lay out a perfect plan. And you will have to take things a bit further if you are buying buy here pay here cars with bad credit. Here are 4 financial planning tips for you to make the process simple. Follow these step by step to stay on the other side of complete bankruptcy.
- Consider what caused your bad credit
Several reason scan pull down your credit score. For instance, if your net debt is more than 50% of your net income, your score will be low. Similarly, an unfortunate divorce settlement might also take away a chunk of your regular paycheck. In such scenarios where you do not take home much of your salary, consider buying from those bad credit cars for sale that carries low price tags. This will bring down your monthly credit payments.
- Pick a quality dealership
Despite your credit score, you will want to invest in quality buy here pay here used cars, Greenville, SC. No matter what price you can afford now, you are entitled to warranties and dealership assurances on the car’s performance. Quality used cars can fetch you a high resale value in the future. If things do go south, you can obtain a loan against your vehicle or sell the same to averse the temporary financial difficulty. Pick a dealer accordingly.
- Try not to stretch your loan
It is no news that bad credit dealerships in Greenville charge a comparatively high interest rate on car financing owing to the involved risk. That means your annual APR will be substantially more as compared to a bank or a credit union. Here, try by all means to get a 3-year loan. Settle for a cheaper car, if required, but avoid stretching your credit span. In the long run, you will end up paying a high interest rate which you could have otherwise saved.
- A high down payment is always suggested
A high down helps to bring down your APR. Transfer a certain percentage from your savings account and pay at least 10% of the car’s net price as down. Add your old car’s trade-in value and take the rest as a loan. Stay away from choosing the either-or option. Do not hold onto cash if you have a car to trade-in. Bad credit buy here pay here cars cost you way less when you pay a significantly high down payment.
There are always exceptions. The above suggestions are not absolute. But use these as your guide while considering bad credit cars for sale as the market is a bit different from the standard used car ones.
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