Often times people who have had credit challenges in the past assume that their credit is so damaged that they will not qualify for a loan.  For some it is a matter of fear of rejection. They are so afraid of being turned down for a loan, that they rather not even try to qualify for financing. Fear of humiliation and rejection is a strong emotion that often keeps many from getting what they need and want in life. This is also true when you think of buying a car.  Strange, but true.

There are many dealers that primarily deal with customers who have poor credit histories. The problem is that they are not as well known as the major companies that market to the mainstream consumer. One of the most well known dealers known to help people buy a car with bad credit is DriveTime.  This company specializes in selling used cars to individuals with bad or no credit histories.    

Another option is to find a local “buy here, pay here” (bhph) dealer. These small, locally owned and operated dealers are known to provide customers with owner auto financing. This means that the dealer will finance the car themselves and make an additional profit on the interest generated by the financing terms. Unfortunately, this also means that they care more risk in their business which results in higher prices and interest passed on to the end consumer.

Finally, some mainstream dealers also have established second chance programs to serve the subprime markets. While most would assume that the vehicles sold under second chance programs are used cars, this is in fact not the case. These dealers will prefer to sell the most economical cars they carry. It is far easier for the dealer to secure financing for a new car loan, where the profit margin is high for both the dealer and the financing company, than it would be to provide financing for a used car that has lost a considerable amount of equity.

So, in conclusion, can you buy a car with bad credit? The answer is yes – BUT be prepared to shop around and make sure you learn to read and understand the terms in those very long contracts. This could save you considerable grief later on. Take some time do your homework and be sure to get a car loan quote .