If you have bad credit, getting approved for an auto loan is tough. If you’ve already applied and been rejected, you may end up thinking you’re not eligible for a car loan. This may not necessarily be true. It might just mean that you can only get a smaller loan. Here are some tips for finding a reliable car at a lower price to increase your chances of getting approved.
1. Play the Waiting Game
Dealers make the most money from customers who need a car now because the dealer knows you don’t have any other options. Take this leverage away from the dealer by making sure you’re in a position where you can walk out the door. If you don’t have a reliable car now, look into a long-term rental for a few weeks or even a month.
What are you waiting for? Dealers often have financial goals they need to reach each month or year. If you can catch a dealer at the end of a bad month or at the end of the year, a great deal is yours for the taking.
2. Rental Car Companies Sell Cars, Too
Ever wonder why most rental cars have fewer than 30,000 miles? It’s because rental car companies have deals to buy a ton of cars cheap, rent them out for a year, and then sell them for about what they paid for them. If you’re looking for a newer car, but can’t quite afford the new car price, this could be a great option.
Why else are rental car companies a good place to look? Most auto loans limit who you can buy from and won’t give you a loan to buy from a private seller. The large rental car companies effectively run their own used car dealerships, so almost all lenders will allow a loan to buy from a rental car company.
3. Go Boring
If you’re going to be spending hours in your car and showing it off to your friends, you may want it tricked out with all the latest features both inside and out. However, add-ons are huge profit centers for car dealers because they cost far more than they’re actually worth.
If you’re struggling to qualify for a car loan, stick with the base models. Most still usually have a nice radio, cruise control, and power windows and locks.
Want to know how high of a car loan you’ll be approved for? Request a quote from a local lender today or use our calculator.