Maintaining a good credit score may be one of the most important things you can do to maintain your quality of life. However, bad things can happen even to good people who are trying their hardest. People fall on hard times after losing a job unexpectedly or falling ill. Some bills go unpaid, and credit card balances are pushed to their max as money becomes tighter and tighter.
Unfortunately, bad credit can make it hard to get the essential things you need, such as a home or a car. You can get car loans for bad credit, which can make it a little easier to get the transportation you need. With a little creative planning, you can expand your options for getting a car on bad credit even more.
Here are a few of the best types of cars to buy if you have bad credit:
3-Year-Old Off-Lease Vehicles
Many people choose to lease a vehicle since the agreement generally offers a lower monthly payment than buying the car outright. A lease payment is based on a percentage of the difference between what the car is worth new (when it is leased) and what the car is expected to be worth when the lease term is over, typically within two to three years.
Leasing is great for those who want a new car every few years but don’t want to spend the money required to buy one every few years. Leasing is also great for those who need a car but who don’t have credit — not to lease the car but to buy it.
You’ll save a lot of money buying a car that has been returned after a lease. The person who leased the car paid the bulk of the car’s depreciation cost, so the car will go on sale for much less than when it was new. Meanwhile, the person who leased the car was also responsible for maintaining the car and keeping it in good condition. You’ll get a car that’s in great condition and selling for a low price. It will almost be like buying a new car.
Spending less on the car will improve the terms of the car loans for bad credit for which you will qualify. You will get lower monthly payments and lower interest rates.
$5,000 or Less “Beaters”
A beater is an older car with high mileage. Beaters can sometimes have a bad reputation as they are often confused with lemons, which are used cars that have serious, chronic problems. A quality beater is one that may be older and may have high mileage but that still has a lot of life left in it.
Beaters are a great option when you don’t have a lot of money saved and don’t have the credit to get a high-value loan for a new car. You can still get a quality car that can get you from Point A to Point B, offering you a reliable ride. Buying a beater will help you get the transportation you need without driving yourself deeper into debt.
Make sure you do your research before choosing a beater. Another benefit of buying these cars is that they have been around long enough to develop a reputation. You’ll quickly learn what the best cars are and which ones you should avoid. Look for reliable models that have an average life span with a very high number of miles.
Older Honda, Toyota and Subaru Models
Some of the best older car models (and some of the best beaters) are in the Honda, Toyota and Subaru families. The best choices are Honda Civics and Toyota Corollas for cars or Honda CR-Vs and Subaru Forresters for sport-utility vehicles. Look for models that are at least five years old for the best bargains.
These models are known for their overall reliability throughout their life span. They also keep running for hundreds of thousands of miles so long as they are properly maintained. When you shop, get as much history as possible about the car or work with a dealership that inspects and certifies its previously owned vehicles. These measures will quickly discover any previous mistreatment of the car and help you feel more confident about the potential future of the vehicle.
Another reason you should set your sights on one of these older models is that they are plentiful in every market and are sold for reasonable prices. Shopping for one of these vehicles can help you get reliable transportation without sending a lot of money and putting even more strain on your finances.
Car loans for bad credit can help you get the transportation you need without having to spend a fortune. However, it is important that you shop with reputable dealers who offer the best terms on these loans. Many unethical lenders are waiting to prey on those who have bad credit or who are struggling financially in some way.
These loans can come with exceptionally high interest rates that will make it hard for you to get a handle on your debt. You may get the money you need for the car, but you’ll only make your credit and your finances worse.