For many consumers, the process of obtaining bad credit
car loans can be intimidating or difficult. Individuals
who have had credit defaults in the past may find it more
challenging to find a lender willing to work with them to
re-establish a positive credit history. Fortunately, there
are a few ways to improve your chances of obtaining the
financing you need to purchase a new or used vehicle, even
if you’ve had credit difficulties in the past.
In many cases, making a sizable down payment or deposit
on the car you want can improve your chances of obtaining
financing for the vehicle. This equalises the risk between
you and the lender, providing them with some assurance that
you will not default on the loan and security for their
investment. In some cases, a trade-in vehicle can serve
the same purpose; this assumes that the trade-in is in good
condition and represents an equivalently large investment
on your part.
Selecting a vehicle that is less than seven years old increases
your chance of obtaining financing from traditional sources.
Many companies that offer bad credit car loans, however,
can provide funds for vehicles that are older than seven
years, and may even offer special incentives for newer cars
in the form of lower interest rates or more favourable terms.
A number of Australian auto finance companies specialise
in providing bad credit car
loans to consumers. These companies
are often willing to work with you to help you purchase
the car you want, even if you’ve been denied by other auto
financing companies in the past. Your interest rate will
typically be higher than for applicants with good credit,
but with a few years of good payment history you may even
be able to refinance your loan to a lower rate, saving you
money over the life of the loan.
By selecting your lending company carefully and working
to improve your credit history, you can often get a better
deal on financing. Saving up for a sizable up-front payment
or using a trade-in vehicle for your down payment can make
a big difference in your chances of loan approval for the
vehicle you wish to buy.
Back to: Home
Page | Car