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3 Tips for Financing with Bad Credit

Bad Credit Financing Tips in Farmington NM

Financing a vehicle can be a headache no matter what your circumstances are, but it can far more difficult if you have bad credit. Bad credit affects your loan rates and your monthly payments for a start. It also can greatly reduce your selection of vehicles, making buying a new or used car a far greater hassle. To help with making the experience less of a headache, we’ve compiled a small list of tips for you to keep in mind while shopping! Continue reading to see what we recommend.

1. Make a Larger Down Payment

As mentioned above, bad credit can affect your loan rates and monthly payments in a negative way. One way that you can combat this is to make a larger down payment when purchasing. Making a bigger down payment will allow you to have a wider selection of vehicles to choose from, giving you the ability to pick one that more suits your needs.

Credit report with a 520 credit score and rejected on it

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2. Check Interest Rates Before Shopping

We also recommend that you go online to check the average interest rates on the market and to make sure you keep them in mind. With a bad credit score you can expect to have higher than average loan rates, but seeing rates that are more than double the average should raise alarms. Always aim to keep your rates as low as possible, and never more than double the average.

3. Read all the Paperwork

Our final tip is that you read all the paperwork you’re given by the dealership. Specifically, we encourage you to read the portions dedicated to your loan rates and what your monthly payments will be. You want to make sure it matches with what the dealership verbally agreed to, and that you make sure you sign the papers before you leave. While our dealership will always honor deals and agreements made, verbal or otherwise, some less reputable ones might alter the terms and call you back to sign.

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These are just three of our tips for making your purchasing experience easier! To learn more about what we recommend you do, or to talk to our financing department about what rates you can expect, contact our agents at AutoMax today!