If even bad credit finance companies won't give you an auto loan, your credit is probably in pretty bad shape. You’ve still got a few options for securing a ride, but No. 1 on your to-do list should be repairing your credit.
Private family loans are one of the few available loan options for people with extremely poor credit. Of course, you need to find a family member who has the financial resources, believes in your creditworthiness and understands what got you into your black credit hole in the first place. Even if you borrow from family, draw up a written agreement that outlines the terms of the loan, including how you'll pay it back and what, if any interest you’ll pay.
Even though it's theoretically tougher to get a car loan from a traditional bank or credit union when you have bad credit, if you're on good terms with the bank where you have your checking or savings account, it might be willing to work with you. Anticipate being hit with a higher-than-average interest rate and special terms, such as automatic payment deductions from your primary account. You might also qualify for a personal line of credit you can use to purchase a car, but the interest and repayment terms could be cost-prohibitive, so do the math first.
Other ways to improve your chances of getting an auto loan with bad credit include saving up for a hefty down payment or getting someone with good credit to co-sign a loan for you. If you just can't swing it, there’s always saving up enough cash to pay for a reliable used car. Carpool or take public transportation to save cash toward paying down your debt, bringing all of your accounts current and repairing your credit so you can qualify for a traditional auto loan in the future.
Bad credit auto finance companies charge exceptionally high interest rates and should be your last choice for getting a car loan. If you exhaust your other options and a car is an absolute necessity, keep talking to different bad credit auto lenders. Go through the Better Business Bureau or your local chamber of commerce for referrals to the most legitimate companies to lessen your chance of getting ripped off.
Lisa McQuerrey has been a business writer since 1987. In 1994, she launched a full-service marketing and communications firm. McQuerrey's work has garnered awards from the U.S. Small Business Administration, the International Association of Business Communicators and the Associated Press. She is also the author of several nonfiction trade publications, and, in 2012, had her first young-adult novel published by Glass Page Books.