If you’re struggling with a poor credit score and need a new car, you may be worried about the possibility of being rejected when you apply for auto finance. However, the good news is that having a bad credit score, or no credit history doesn’t need to get in the way of you getting behind the wheel of your new car. There are several options available to you which you might want to consider. These are:
#1. Buy Outright
If you’re worried that you won’t be accepted for auto finance and want to avoid getting into any extra debt, the best way forward may be to purchase a vehicle outright instead. You can find many second-hand cars for a fraction of the retailing price that are in great condition with plenty of use still left in them. Or, if you have the time, work out how much you’d be paying each month for auto finance and put that away instead until you’ve saved up enough to purchase the car that you want.
#2. Guarantor Loan
In some cases, individuals with a poor credit score can get help with attaining credit from a guarantor. In general, this will need to be somebody with a good credit score, and some lenders will also require them to be a homeowner. You’ll also need to choose somebody who’s close to you and trusts you, as they’ll be responsible for any payments that you miss. A guarantor loan can cover all or part of the cost of purchasing a new car, depending on how much you’re eligible to borrow.
#3. Poor Credit Finance
Today, more and more companies are recognizing the need for everybody to access a decent car, and accept that for many individuals, auto finance is often the only way to achieve this. You may want to consider bad credit car loan options – usually, companies that offer this option will only carry out a very basic credit check and ask you to list your income and expenditure to work out what you can comfortably afford, instead of using your past credit history. And, you can find affordable prices and great rates even if you do have a bad credit rating.
#4. Car Leasing
Another option that you may wish to give some thought to is bad credit car leasing. In this instance, you will be renting the use of the car rather than purchasing it over time with your payments. The car will still be yours to do what you like with, and when your lease term is up you’ll be given the option to purchase the car for yourself or trade it in for a different one, which is usually a popular option. Many car leasing companies will also cover services such as breakdown recovery and even insurance included in the price.
Having a poor credit score shouldn’t mean that you can’t get a new car. Although it may be more difficult to get traditional auto finance, these alternative options are certainly worth considering.