By Zeid Nasser on Monday, July 03, 2017

If your credit report is a little bit less than perfect, like that of over half of individuals living in America, you may be thinking that you have no chance of purchasing a new car to get around town. Luckily, though, a poor credit score doesn't necessarily mean you have to go out and buy a bus pass. If you do your research, you can find car financing even with bad credit.


Plenty of lenders are willing to give loans to borrowers with bad credit. However, you need to be careful when shopping around to make sure that you don't get overcharged. Here's how to find the best deal when looking for car financing with bad credit.


Do Your Research

The first thing that you should do when thinking about a purchase as large as a car is to check your credit report. You may have better credit than you realize, especially if it's been awhile since you last checked. You can check your credit for free once every 12 months by visiting, a government-authorized site. Some banks also offer free credit reporting for customers.


If you have a poor credit score, you can expect to pay a bit of a higher monthly rate for your car and its insurance. You should take the time to figure out how car payments will fit into your monthly budget to see what type of car you can afford.


Find a Reputable Dealer

Not every dealership will give car loans to customers with bad credit. Direct lenders such as banks, credit unions, and finance companies are the main providers of car loans for people with poor credit scores. Some dealerships will work with direct lenders to offer loans to clients who would otherwise be deemed too risky. There are also direct to consumer auto lenders online that can approve your application in a matter of minutes. You may want to consider getting pre-approval for a loan to make the shopping process go more smoothly, or to help you find better offers elsewhere.


Ask Questions

As with any important decision, when buying a new car, you need to make sure that you have all your facts straight before committing to a purchase. Don't be afraid to ask your lender or dealer plenty of questions to make sure that you understand exactly what it is that you're agreeing to. Be sure to ask things such as:

-How much will I be paying each month?

-Is there a prepayment penalty?

-How much will I be paying in interest over the timeframe of the loan?

-How do I refinance a loan with a high interest rate?

-Can I save with a shorter-term loan?


With some time, investment and a little bit of research, you can find a car loan that fits your budget, even if you have poor credit. It's becoming easier than ever to find an affordable car loan online or in person, regardless of your credit score.