Finance Roll

For those that have less than perfect credit scores, auto financing bad credit is a viable option. Traditional financial institutions as well as credit unions for the benefit of the customers extend the loans for auto financing bad credit. You can also obtain the auto financing bad credit from a number of car dealers and manufacturers. If you have faced bankruptcy, vehicle repossession or foreclosures in the previous year, you could still get a loan.

The US carmakers are also asking for bailouts from Congress

Remember that the big 3 carmakers in the US, have pleaded for more than $34 billion in bailouts. They have also seen their car sales slump in the past quarter and are eager to get their cars rolling. If you already have a car loan, you can get the loans refinanced and pay off the old loans. Based on these points, you may be able to negotiate for a better deal on car financing.

Checking credit scores

Before you apply for the auto financing for not so perfect, check your credit scores. Most banks use the FICO score. The FICO score includes your payment history, loan history, credit card history and the all transactions that you have done. In case you have defaulted on loans, you would have a less than perfect score. Those that have less than 600 score as termed as risky. Obtain your credit report and if you find any loopholes, then report it immediately.

Getting the documentation

After you have checked your credit report, set your documentation in order for getting a car loan. You should have proof of your employment as well as income along with a residence proof. Utility and credit card bills for residence would also do.

Get several quotes from lenders

Depending on your financial health, chalk out the current debt for the auto financing bad credit that you could afford. There are specialized loan brokers that can help you to find the lenders for auto financing bad credit. Or you can search the Internet for the quotes. Either ways you can get several quotes from a number of lenders for getting a loan.

Based on the quotes that you get from the lenders, you can negotiate for a better interest rate and a better term for the bad credit auto financing. Remember that interest rates on new vehicles are lower than that on old used vehicles. Even if you have bad credit, you can negotiate for better rates, and this depends wholly on your negotiation skills.

Many lenders also charge a higher down payment for auto financing bad credit. In most cases it can range between 20-50%. Remember that the loan amount comes down with higher down payments. When you get the loan for auto financing bad credit, remember to pay it on time. If your loan agreement doesn't charge pre payment penalties, try to pay off the loan. By doing this your credit scores will increase. This will lead to favorable interest rates in the future.