How to Buy a Car with Bad Credit

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If bad credit has left you high and dry, but you need a new car, get back on the road despite your lackluster credit score.

Step 1: Check your credit report
Go online and check your credit report -- you're entitled to one free report each year. Make sure everything is accurate.

Tip
If you have a bad credit score, don't expect to haggle for the best interest rate.

Step 2: Refinance later
Refinance that high interest loan down the road when your credit improves or when rates drop; just be consistent and on top of your payments.

Step 3: Shop around
Shop around for the best deal either through a bank or through an auto dealership. A bad credit score doesn't mean you can't get a good deal.

Tip
Work around your paycheck schedule to be sure your car payment is the first to be tackled each month so you don't get behind.

Step 4: Shop smart
Shop for a car when sales are slow, such as in bad weather, around holidays, before closing time, or at the end of the month.

Step 5: Look at used cars
Go to dealers who do their own financing. This may mean downsizing your expectations, but it's better than no car.

Did You Know?
At an average price of $28,000, a new car is the 2nd-biggest purchase the average consumer ever makes, after a house.