There are some car dealers with Buy Here Pay Here financing that will only approve you for a loan only if you have an auto loan in your credit history. Many car buyers with bad credit have indicated that car dealer will charge you a higher interest rate of APR, sometimes as much as 15%.

The car sales man could tell you that your credit rating or FICO score is 450 when it is actually 600. They sometimes point out that the bank requires car buyers to purchase warranty, credit life insurance and may include requirements in the fine print that could cost you more money.

In some cases dealers have lied to bad credit car buyers saying that their auto loan application was rejected because their credit score was too low and invite you to find a co-signer for the loan, which now gives them access to two customers instead of one. Because you may have done to auto dealer after auto dealers and you have been turned down, your self esteem may have gotten a little down and the dealer manipulates you into signing an agreement that could bring untold havoc to you financial situation.

This agreements of contracts could lead you to become upside down on your bad credit car loan and force you deeper into an unwanted debt with high interest rate, and high monthly payments.

This high payments may force you to miss paying on time and the dealer now have the option of increasing your payments via extra fees such as late payment fees or repossess the car.

So, you have to be very careful. There are even cases where banks and other lenders have called bad credit car buyers telling them that the dealer did not pay down on the trade in vehicle.

Apply to Many Lenders with One Car Loan Application

Whether you credit is good or bad, the best thing to do is get pre-approved for your car loan first. Then you can go to the dealership with negotiating power. Too many times people with bad credit believe that they have no alternative.

There are many banks and financing institutions that are willing to help people with bad credit get a vehicle. Try applying online where you can get a car loan quote from multiple car financing lenders for free.

By doing it online your application is sent beyond you local car dealer to a wide network of lenders that are willing to help. If you spread you net, the greater the possibility of get a good deal.

Take for instance that you would like a loan for a Honda Civic, but you local car dealership does not have one, then by doing it online you can get an incredible deal from another dealership and lender around the nation.

However, in most cases you are required that you have a job and that your monthly income is at least $1,200

Why Bad Credit Car Buyers Get Bad Deals

Someone once said that ignorance is bliss. In this case inadequate information, ignorance, too much debt coupled with a low credit score or no credit history help to put bad credit car buyers in a deeper hole.

Many times the loan offered by the car dealers 48 to 84 months loan with low monthly payments but high interest. By the time you are half way through paying the car, it is already old and needs regular repairs, and you need to repurchase another.

So you trade in the old for a new and you find yourself being upside down on your car note. low monthly payment is sometimes a trap. Focus on the total prices of the car, not on the monthly payments.

How to prepare for a car loan

If you credit is good, say, above 700, it is likely that you will get a car loan with low interest as low as 5%, but it you credit is bad that could increase to as much as 15%. First, get a credit report from all three credit report agencies: Experian, Equifax and Transunion – 3-in-1 credit score Now!.

Look for discrepancies within your credit report. Try to repair your credit report by paying of your current debt, paying your monthly bills on time, reducing the number of credit cards you hold to about 3 and reduce the amount times you credit report is retrieve by loan institutions.

If done well, you could bring your FICO score up to 700 within a six months period.

When you have fixed you credit get pre-approved before visiting the car dealership. Never sign a car loan with financing extended warranties and bogus insurances. Read the fine print before you sign anything

Very important: if you have bad credit please do not buy a car, particularly a new car right now. Work diligently to repair your credit so that you can be credit worthy in a few months. Stay away from credit programs that advertise fixing credit overnight.

If you pay your bills on time and reduce the amount of debt you owe, you can increase your FICO score in matter of months. Trying bringing you credit score to above 600, event 700. Try putting 15 to 20 % down.

If you spend some months reducing debt load and increasing your savings you will be able to put away the 20 %. Also, if you are capable of raising the 20 % you might want to consider going to an auction as an alternative. You can get a car for 50% below the car value at auctions.

Try anything to not to be upside down on a loan.  Also, with 20% down you are more likely to get a bad credit car loan.

How to Maintain Your Credit Score

First, get a free credit report at least every 3 months. This will have no affect you credit rating. Please stay away from applying for credit through the loan application and retail credit card deal as these can have a negative effect on you FICO score.

You should get you credit score before going to the dealer because in some cases dealers lie about credit scores. If they report a discrepancy on you credit, you can confront the dealer and even use this as leverage.

Get your credit from the 3 credit bureau so that you can have 3-in-1 credit score Now!

Have you ever had experiences with Car dealers?  Tell us about it.