The process of buying a new car can be challenging enough, but it only gets more so when you have a bad credit score.

The vast majority of people need a car to get to work, to drive their kids to school and back, and for all those everyday chores. Finding a loan to cover the price of a new vehicle can be extremely difficult with a bad credit score, as many banks and lenders will see you as a risky investment. Visiting a used car dealer, though, can make things much easier. Certain dealerships will be happy to offer financing to customers with lower credit scores, but what questions should you ask before you can make an informed decision?


  1. Is There a Minimum Credit Score I Need?

This is perhaps the most important question – it enables you to know whether or not you can actually qualify for the dealer’s financing. They may only give loans to customers who have a rating above a certain number, and if yours is below that, it’s best to know before you visit them to avoid wasting time. There are many online sites that you can use to find out what your actual credit score is. An annual free credit report from each of the three major credit reporting companies (TransUnion, Equifax, Experian) is available to everyone.


  1. How Long Do I Have to Wait for Approval?

A number of dealerships promise instant approval, but what about the rest? Will you be approved for a loan within a matter of minutes, or could it take hours or even days?

You want to find out how quickly you can start looking for the car you need, without having to wait for the all clear. Go for a dealer offering instant approval, if possible. 


  1. Is There A Minimum Down Payment Required?

If there is a down payment required, does it have to be huge just because you have a poor credit rating? Your dealer will be looking to secure your financing as easily as possible, so they suggest a down payment. But if you feel it’s unreasonable or more than you can pay, try to negotiate. Be realistic, but don’t automatically settle for the first amount they throw at you.


  1. How High Will My Interest Rate Be?

Your car financing’s interest rate can make or break the deal. You may be able to get fast approval and a small down payment, but if your interest rate is going to make the payments higher than you can readily afford, it’s not worth jumping at. Again, you may need to negotiate, and be sure to calculate how much your interest rate will end up costing you before you agree to a percentage.


  1. How Does the Financial Application Work?

What forms will you have to fill in during the application process? What documents will you have to show to support your income and ability to repay the loan? One dealership may offer a much faster, more streamlined application process than another. Still, it’s vital that they make it easy for you and explain what each step involves. In brief: you should have a clear understanding of what is expected of you, from start to finish.


  1. Which Cars Will I Be Able To Choose From?

Some dealerships may try to push you to choose one type of car over another, based on your credit score. They could tell you that you only qualify for a specific model or brand, which may not be the kind you are actually looking for. It’s important to know exactly what vehicle you will be purchasing before you agree to financing with the car dealership. After all, you don’t want to sign on the dotted line and find that the vehicle they have in store for you is entirely unsuitable for your needs.


  1. Can I Negotiate The Length Of The Loan?

Your car dealership may provide you with a choice of a short-term or long-term loan. The length will determine how much you pay each month – a shorter one will leave you clear of debit sooner, but a longer option will create lower rates.

The latter could help you balance your payments along with your other financial responsibilities, but depending on the interest rate, you may end up paying more than you should. Be sure to speak with the car dealership about the terms available and try to find a comfortable middle ground that suits you best. The dealer may only allow you to go for one or the other, but there’s no harm in seeing if they will negotiate.


  1. How Will I Make Repayments?

Your dealer should be willing to explain the repayment process in detail, to make sure you understand when your payments will be due, how much they will be, and what payment methods you can use. You should have all this information in writing too and agree on a fixed payment date each month before anything is signed.


  1. Will there Be Prepayment Penalties?

You may be able to pay more of your repayments off earlier than you think. Perhaps you end up coming into a little money, your other expenses get reduced, or you simply decide you want to shorten the term length. However, there may be a penalty if you pay off the entire loan ahead of the agreed date. Penalties can obviously add to the overall cost significantly and leave you in a difficult situation. You need to avoid them wherever you can, so make sure you check before signing a finance agreement.


  1. How Much Experience Do They Have Financing Auto Loans?

Working with a dealer who has years of experience means they will be more comfortable with the process, handling customers from different backgrounds, negotiating payments, helping to match the ideal car to the customer’s specific needs, and more. While a dealer new to the industry or a salesman new to the job might know their stuff just as well, going with one who has dealt with dozens, or possibly hundreds, of borrowers will give you more reassurance.

Having bad credit can make getting an auto loan hard, but the right dealer can make it as easy as possible. Once you have a loan in place, paying it back will help you improve your credit rating and show that you are a low-risk borrower in the future. However, it’s essential to know everything about your car financing before you sign a contract and asking these 10 questions can help you do just that!

At G&E Motors, we know that securing financing your new vehicle purchase may be a real struggle if your credit rating is not good. With today’s very active lifestyle, we all need a reliable vehicle. Whether it’s going back and forth for work, transporting the kids to school and sports, or just handling everyday chores, trying to get by without a car or truck can be very frustrating. That’s why we offer guaranteed loan approvals, regardless of your credit score. So, check out the unbeatable deals on our inventory of quality used cars and trucks. For more information, give us a call at 267-560-5519, or drop in any time – or staff is dedicated to help you drive away with the right vehicle at an affordable price.