Now that I am working for myself it will be awhile before I can secure financing for a vehicle – luckily I think my car still has quite a few miles left on her. Securing financing for a vehicle is not only hard for the self-employed but also those with less than stellar credit.
Luckily, there is more than one way to obtain car financing. Here are common methods for securing financing for a new vehicle.
Finance Through a Bank or Credit Union
The most common vehicle financing is through a bank or credit union. However, I think it’s important to check rates yourself instead of having a car lot do that for you.
When I bought my vehicle in 2008 the car salesman was trying very hard to get me to go with one of the lenders he worked with. Fortunately, I did my homework and was able to land financing through a local bank that ended up saving me hundreds of dollars in interest.
When you purchase a vehicle check rates yourself. If you have bad credit you may still be able to find a lender that takes into consideration more than just your credit score like Money Barn.
Finance Through a Buy Here, Pay Here Car Lot
A lot of people are against purchasing vehicles at a buy here, pay here lot. I get it. These type of car lots can rip you off – but not all of them will.
One of my good friends parents own a buy here, pay here car lot and they are some of the most honest people I know. They don’t charge astronomical interest rates and they work with people who are a little late on their payments. Of course, you can’t expect a buy here, pay here car lot not to repossess your car if you don’t pay – a bank would do the same.
If you choose to go this route check Better Business Bureau ratings, customer reviews, and get all the information on interest and terms.
If All Else Fails
If you still have trouble financing a vehicle you’re left with one option: wait. Work on your credit or save up cash for your next vehicle purchase.
With a little bit of time and concerted effort you should be able to improve your credit score and save up enough money for a sizable down payment on a vehicle.
