If you are interested in reestablishing your credit with a bad credit car loan, choosing the right kind of car can be the most important decision you make.
The basics
Here at AutoNet Financial, we very rarely get questions from our applicants asking what kind of car they should get as they begin the process for a bad credit car loan. The fact is that most of you out there applying for this kind of credit know what you want. The problem is that the kind of vehicle you have in mind is usually not a small to midsized car. Instead, may applicants see this as a chance to get as close as possible to their dream car. But getting your dream car with a loan designed to reestablish your credit is not the best idea. This is why:
Problems with the “dream car”
What do you think of when you hear the words “dream car”? For many, it means an SUV. Unfortunately, while many of our customers want to buy that SUV right now, it hardly makes sense to do it at this point in time. For one thing, the high interest rates charged by sub prime lenders will put the payment out of the reach of most budgets. For another, the higher insurance costs for this kind of vehicle will usually put even more pressure on your monthly transportation budget.
So take our advice: it’s better to get a small to midsize car to keep your payments and insurance premiums low. Furthermore, if your budget can handle it, finance your car for the shortest term possible to save on interest expenses. Remember, it’s far more important to impress future lenders with your positive payment history, rather than trying to impress them with a high credit balance.
Step by step
If you’ve financed your first bad credit car loan for a shorter term, you should be in a position to refinance or purchase a newer vehicle in two years at a lower rate. The next step is to carry this contract for another two years and, with other improvements in your credit, you could be ready to finance something very close to your dream car at a near normal rate.
A lesson learned
Our advice: Don’t try and reestablish your credit with a big, expensive sport utility vehicle. Focus on getting back in the good credit game. Go to our web site at www.AutoNetFinancial.com. There you will find information that includes calculators designed to help you budget for a car as well as a wealth of other information designed to educate you on the bad credit car buying process. Here at AutoNet Financial, we hope to get you back “on the road” to better credit.
