What Kind of Car Should I Get?

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - February 19, 2020

When you're struggling with credit challenges and need to get a vehicle, car choice is important, but maybe not in the way you're thinking. Of course, everyone wants to get the vehicle of their dreams, but this isn't always practical when you have poor credit or are struggling financially. It's a good idea to find a balance between the car you want and a vehicle that meets your needs.

Vehicle Options for Bad Credit Borrowers

If you need a bad credit auto loan, you may think that the only vehicles available to you are old, high-mileage clunkers from a used car lot. You may be surprised to find out that you have more options than you think. Bad credit borrowers may be able to qualify for an auto loan on a new vehicle, in some cases. In fact, it may even be easier to get a loan on a newer car than an older one.

When it comes to vehicle choice, you typically have three options: new, used, and certified pre-owned (CPO). Each type comes with pros and cons, and the one that's right for you depends on your situation.

Let's take a look at the differences between the three:

  • New – New cars are often desirable because they include some of the latest safety and technology features many buyers are looking for. They have little to no miles, and have never been owned by anyone else. New vehicles are also covered by a manufacturer warranty which can typically help save you money on repairs during the warranty period. These features often come at a premium, however, which you can see in the high price of many new cars. If you're struggling with credit issues, it may be harder to find a new vehicle that fits into your budget. To check out new cars, click here.
  • Used – Used vehicles are usually the most affordable option for credit-challenged consumers in terms of initial cost. However, used cars come "as is," usually without manufacturer warranty coverage. The condition of used vehicles varies depending on how they were treated by previous owners. The cars have miles – sometimes a lot – and should be inspected by a certified mechanic before you sign a contract. In some cases, the history of use, mileage, and age of a used vehicle may not justify the lower up-front cost; you may not actually save any money if you constantly have to pay for repairs. To browse used cars, click here.
  • Certified pre-owned – CPO vehicles may be the best of both worlds when it comes to buying as a poor credit consumer. These cars are often off-lease, typically ranging between two and three years old. This means they've usually only had one owner and offer many of the advanced safety and technology features that people want, but without the high price tag of a new vehicle. Additionally, CPO cars are inspected and refurbished by manufacturer-certified technicians before they're put on the lot, and they come with some form of manufacturer-backed warranty.

Whichever type of car you decide is best for you, make sure it meets your driving needs. In order to get the most out of your auto loan, it's important to ensure that the vehicle you choose is a good balance of affordability and reliability.

Choosing a Reliable, Affordable Car

Choosing the right car is only half the battle when it comes to getting a bad credit auto loan. The other side of the coin is an affordable loan. As a consumer with poor credit, you're generally only going to qualify for a higher interest rate, and possibly a shorter loan term. Because of this, it's important that you balance the overall cost of your loan with your loan term.

If you choose a more expensive vehicle and need to take out a loan for seven or eight years just to make the monthly payment fit your budget, you're going to end up paying more than necessary in interest charges over the loan term. In order to keep your car affordable, you should take out an auto loan with the highest monthly payment you can comfortably afford, for the shortest term possible.

Don't forget that the selling price is only the beginning. Car loans also have interest charges, taxes, and title and license fees you're going to have to pay. Additionally, all auto loans require you to carry full coverage insurance. Don't forget to budget for the cost of fuel, regular maintenance, and repairs, as well. Not sure how to budget for all this? You can use our car loan calculator to see how much vehicle you can afford.

CarsDirect Tip: In order to stay within lender limitations as a bad credit borrower, at least 45% 50% of your pre-tax (gross) monthly income must be available after you include an auto loan and insurance payment in your monthly budget. Lenders also require that the combined amount of your monthly auto loan and car insurance payments not take up more than 15% to 20% of your monthly gross income. These two factors are known as the debt to income and payment to income ratios.

Ready to Begin Your Search for a Vehicle?

Having bad credit doesn't have to limit the type of vehicle you could finance. You can research new and used cars, find financing advice, and get connected to a dealership in your area, all in the same place. When you're ready to find your next new, used, or CPO vehicle, start here at CarsDirect.

We work with a nationwide network of special finance dealers that have the lenders available to help people in unique credit situations. Let us get you connected to a dealership in your area. Simply fill out our easy, zero-obligation auto loan request form to get started right now!

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Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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