The Dos and Don’ts of Car Financing

A car salesman is shown holding a car key after speaking with a customer about bad credit car financing.

For those who are working on their credit, you’re certainly not alone, with approximately 48 million Americans in the same boat as you. Fortunately, you’re still able to make large purchases, like a vehicle, through the help of bad credit car financing, and at Paradise Motors, we want to help. If your credit has been affected by debt, bankruptcy, or other unfortunate occurrences, it’s important to remember that credit scores have the potential to rise, especially when you put in a little bit of work. When it comes to buying a vehicle, we’ve compiled a few dos and don’ts of car financing and how you can prepare yourself for success, not only with your vehicle purchase but also with the future of your financial situation.

DO - Get a Handle on Your Finances

It is extremely important to have some knowledge about your current financial situation prior to beginning the car-buying process. This means running a credit report to see just where your credit lies, and with so many free credit reporting sites available these days, this task is relatively easy. Once you see exactly what your credit score is, it’s time to start improving this situation as best as you can before you go to a dealership and apply for a loan. This means making regular payments on your debts and paying down as many debts as you can. You want to ensure that revolving utilization stays below 30% and that you’re keeping up with utility bills, rent or mortgage payments, and every other financial obligation you currently have.

DON’T - Forget the Necessary Documentation

When you apply for a vehicle loan, you’ll want to be prepared with the necessary paperwork to get the ball rolling. From your identification to proof of income, proof of residence to your credit history, having as much documentation as possible will allow this process to go by seamlessly. You’ll also want to consider putting money toward a down payment on the vehicle you want to help make your monthly payments much more manageable, so bringing a form of payment is advised. It’s also recommended to bring in proof of insurance, as well as your current vehicle’s registration information, if you plan on trading it in.

A close up of a set of keys on loan paperwork is shown.

DO - Stick to Your Budget

Your budget is perhaps the most important aspect of your car-buying experience. It is absolutely imperative that you figure out what you’re able to afford and find a vehicle that fits within these parameters. The vehicle you choose shouldn’t place you in a stressful situation, so finding vehicles that work with this budget is crucial. Remember, once you get yourself back on the right track with your credit, you’ll be able to buy a better vehicle with a better payment plan the next time around. So, even if the vehicles that reside in your price range aren’t your dream vehicles, it’s only temporary, and as your credit improves, so will the vehicles that you’re able to afford.

DON’T - Choose the Wrong Loan Terms

There are a variety of loan terms available in the auto industry, with typical auto loans lasting anywhere from 24 to 84 months. Although the longer the loan term, the lower the monthly payments tend to be, this isn’t always the right choice, especially considering that there will be more interest that accrues during this lengthy amount of time. The longer it takes you to pay off the loan, the more interest charges rack up, so if you want to work on improving your credit with your auto loan, you’ll want to choose a loan term that’s not too long. This is made easier when you partner with a financial professional who has your best interests in mind, which is exactly what you can expect here at Paradise Motors.

DO - Make Regular, On-Time Payments

The best part about finding a car loan that suits your financial needs is the opportunity you’ll have to work on your credit and improve it while also driving a car you can depend on. It’s imperative that you make regular, on-time payments on your auto loan to ensure that your credit will be impacted in a positive way, thus setting yourself up for financial success. Credit bureaus want to see that you’re able to be a trustworthy borrower, and having a dealership that’s ready and eager to take a chance on you can make all the difference in your financial future.

DON’T - Think That Buying a Car Is Out of the Question

Just because your credit isn’t the best, it doesn’t mean that you can’t find a car that’s safe and reliable. No one deserves to drive an unsafe vehicle, so if you’re under the misconception that you’re stuck with your current vehicle, this simply isn’t true. At Paradise Motors, we offer our buyers, who are working on their credit, plenty of quality options for fair prices, with payment plans to match their budget. The worst thing you can do is not take action because you feel as though you’re stuck. By finding a car that’s better suited to your needs, you’ll enjoy a better ride while also working on getting your credit back to where it needs to be.

DO - Shop Around

It’s important to realize that no one needs to settle when it comes to the car they need and the payment plan they deserve, which is why we recommend shopping around and seeing what options are available to you. You may find that the first dealership you visited didn’t quite offer you the finance plans you wanted, while the next dealership was able to meet your expectations. At Paradise Motors, we pride ourselves on offering a variety of bad credit car financing options to our customers, based on their unique needs, with clear, transparent pricing and no hassles along the way.

A woman is shown holding a car key while in the front seat of her used vehicle.

DO - Work With a Trusted Car Dealership

When you partner with the right car dealership, you’ll not only get to choose from a wonderful assortment of vehicles, but you’ll also have confidence that the payment plan that was designed for you works with your finances. You want to team up with a dealership that’s respected and comes with great reviews, one that specializes in bad credit car financing because they know exactly what tools you need to harness maximum success.

Your Financial Success

This is an exciting time for you! Not only are you working on improving your credit, you’re ready to shop for a car that can further assist you with raising your credit score. It’s a win-win situation for you, which places you in a really great position. Here at Paradise Motors, we’re eager to help you find the car that works with your lifestyle, as well as your budget. Our experts will lead you to the options that have the features you desire while also fitting into your price point. We’ll also help you improve your credit by offering you financing options designed specifically for customers just like you.

So, if you’re in need of a new car and you’re apprehensive about your credit situation, stop by Paradise Motors and see how we can help. You’ll quickly realize that you have more options than you imagined, as well as financial plans that are tailored to you. We want to help you get your credit score back to where it should be, and if you follow these simple tips, you’ll be on your way to a spectacular credit score and a reliable vehicle in no time.