How to buy a new car with bad credit

bad creditBuying a new car with bad credit isn’t the easiest thing you’ll ever do.

Then, again, it’s not impossible, either.

“It’s possible to buy a new car with bad credit if you know where to look and how to prepare,” says car-shopping website.

“Contrary to popular belief, there are a number of reasons why a lender would help somebody with a troubled credit history to buy a new car … if you do your credit homework, shop within your price range and make all of your payments,” says Ronald Montoya, consumer advice editor.

Of course, has some specific suggestions that you should follow to get that loan if you are a subprime shopper. Here are several of them:

Run your credit report. offers one free report per year from each of the major credit reporting companies. The report will help you identify “risk factors” in your history — such as old debts and unpaid fines — so that you can fix them. recommends taking this step at least three months before you plan to buy so that you can take action on any outstanding items before engaging with the dealership and other lenders.

Show that you’re a good risk. When you apply for financing — especially at a dealership — bring proof of improved financial stability. These items may include a recent pay stub, a utility bill and a list of personal references.

Stay well within your price range. Just because you qualified to buy a $22,000 midsize sedan doesn’t mean you should buy it. For example, if you scale back and purchase a $17,000 compact sedan, you’ll free up $100 per month. This is money you could use for gas, insurance or other bills.

“The segment of buyers with less-than-stellar credit makes up a growing chunk of the automotive market,” reported “According to credit monitor Experian, nonprime, subprime and deep-subprime buyers accounted for 34.1 percent of all new auto loans in the fourth quarter of 2013, up from 32.8 percent in Q4 2012.”

(Lenders such as Santander Consumer USA Inc. provide funding to car buyers across the credit spectrum, including nonprime and subprime, through Santander Auto Finance, so you can ask your dealer to include SAF among the lenders to which that dealer shops your loan. It doesn’t mean SAF will always offer the best loan terms but why not ensure you’re getting the best possible financing.)

Look here for more details on how subprime shoppers can get on the path toward buying a new car. is a car-shopping Web site with tools used by almost 18 million visitors every month to connect with over 9,500 dealer franchises across the United States.

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