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Having low credit score is not the end of securing good financing terms. It will be more difficult than usual to look for a borrower who accepts this kind of borrower. Terms may not always be as great as what are available for those with good credit but a fair deal is still possible. Bad credit does not mean bad loan terms.

To get better car finance with bad credit, use these tips:

Tip #1: Be with someone when securing car finance.

Experts suggest bringing along someone when applying for a loan. An extra set of eyes and ears can help see any term, which may not in the best interest of the borrower. There is a tendency for borrowers with bad credit to grab the first offer for car finance. The other person can be more critical in poring over the terms of the loan.

Tip #2: Choose based on loan terms rather than on monthly payments

Some people immediately look at how much the monthly payments will be. This may be a good thing in order to make monthly payments easier, thus, reducing the risk for late or missed payments. These can further credit scores. However, in the end, shorter loan periods typically come with lower annual rates. If longer loan term is needed just to make the monthly payments, then it is highly probable that the vehicle is out of the borrowers price range. The best action? Look for a less inexpensive vehicle.

Tip #3: Check the add-ons

Subprime borrowers have higher possibilities of getting loan contracts with unnecessary add-ons. Do not agree to these, which include extended warranties, insurance and after-market services.

Tip #4: Be cautious against yo-yo

The yo-yo is a classic move of some unscrupulous car dealers. This is when the buyer is informed of an increase in the monthly payments or down payment a few days or weeks after the sale. This can happen if the contract is conditional or contingent. Buyers who sign this type of contract generally pay higher rates, with an average of 5% higher than what should have been paid under different circumstances.

Tip #5: Scrutinize the contract

A lot of buyers/borrowers are just too happy and eager with their car finance and car purchase that they just sign their names without looking at each and every item on the contract. Read everything. This will take us to the next tips.

Tip #6: Negotiate

Do not be scared of negotiating. A bad credit is not ineligibility for negotiations. Borrowers with bad credit can still negotiate and get a better deal. Granted that a poor credit score does place a borrower at some disadvantage. It will be harder to negotiate the terms of the auto loan. However, enough research and planning can help in this case. Before buying the car and applying for car finance, check the prevailing purchase price and interest rates. Check that the price is within the budget.

Next, check the monthly payments and see if it it is within the set budget. Negotiating the auto loan terms can be quite a feat. An alternative is to try and negotiate the purchase price. A small amount saved now will have a huge impact later when about to close a car finance with bad credit.