Qualifying for an auto loan when you have bad credit is usually simpler if an auto dealer is willing to work with you. Banks that have prior relationships with an auto dealer will go the extra mile to help the dealer's customers get financing. Finding an auto dealer that finances people with bad credit will improve your chances of getting the car you need.
Check your phone book's automobile and car section for used car dealers. Smaller dealerships do not always advertise on the Internet, but most will have a listing in the Yellow Pages. Focus on auto dealers that say they are "buy here, pay here" dealerships. Auto dealers that let buyers make monthly car payments at the car lot offer in-house financing.
Talk to friends and family members with credit problems. Some auto dealers that specialize in bad credit financing rely primarily on word of mouth advertising. When talking to someone about their experience with a bad credit auto dealer, ask questions about the length of the loan, interest rate and required down payment.
Call the auto dealers you find and ask them if they finance people with bad credit. If they do, ask the sales agent what minimum credit score they require in order to approve financing. Dealerships often place customers into tiers based on their credit scores. Find out if the dealership takes prior auto loan payment history into consideration when reviewing loan applications.
Get a recent credit report and credit score. Knowing your credit score and credit report weaknesses will prepare you for negotiating with an auto dealer. Make sure past auto loans have zero balances, since having a positive auto loan repayment history can influence an auto dealer's decision about whether to finance a purchase.
Complete an auto loan application. Auto dealers that finance people with bad credit will require more documentation than traditional lenders. Bring copies of recent pay stubs, tax returns (if self-employed), utility bills and rental lease. A dealer may also ask for several references and documents proving residence.
