December 05, 2001
By: Bev Dodd
Bad credit car loan: Low rates, easy terms
Used cars with high mileage can be a good deal sometimes, and can lower the total amount you want to borrow on your bad credit car loan. Don't forget to look at your credit score before you apply for a bad credit car loan.
Your credit score is the single most important factor in determining whether you'll get approved for a bad credit car loan, and what the APR of the loan will be. Keeping your credit score high should be an ongoing process. If you attempt to clean up your score just before applying for the loan, banks may reject you because you have disputed an item on your credit report, until it resolves in 30 days. Because it can take up to 60 days to clean up your credit score, don't apply for new credit until all disputes are resolved and you verify the score.
If you can avoid it, try not to finance a bad credit car loan for 6 years. You'll never get your equity out of the car. If you want to trade it in during the first 3 years you will owe more than what it is worth on a trade-in. The only exception to this is if you come in with a huge down payment. Most people just don't have the big down, so they go for the 6 year financing, looking for a lower car payment. Try for a 3 year bad credit car loan if you can manage. The average new car depreciates 35% in the first year, and another 35% by the second year.
And finally when shopping for a used vehicle, don't be frightened off by high mileage. Shoppers who traditionally have ruled out older cars with high mileage are discovering these can be excellent buys. The average age of a vehicle now exceeds 7 years, an increase of 50% during the past decade. Vehicles are more durable, and we're putting more miles on them. And you can usually keep the cost of your bad credit car loan down.
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Bev Dodd is a successful author and publisher of http://www.family-refinance-consolidation-loans.com.
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