Bad credit car loans can be a great way to get behind the wheel after serious debt issues. When looking for a new (or new-to-you) vehicle, it’s important to find a plan that you can afford without straining your finances further. We’re passionate about getting everyone financed at Pearson Mazda — here’s everything you need to know about bruised credit car loan options.
What Counts as Bad Credit?
If you have recently recovered from credit issues, you may still be rebuilding your credit history. Unfortunately, if your credit score is in the subprime category or lower — below around 619 — it can be hard to find an affordable plan with traditional financing. When you’re in this category or below, keep an eye out for dealerships that focus on drivers with bad credit.
Rules of Thumb to Follow
While you may not have the room to be flexible if you have bad credit, it’s still good to try to follow the 20/4/10 rule when finding the plan for you. To follow this rule, put down at least 20 percent of the purchase price as a down payment, choose a plan with a term of less than 4 years, and keep your monthly transportation costs at under 10 percent of your income. If you’re having issues finding a plan that meets these requirements, consider saving up more for a bigger down payment.
Things to Avoid
Making a small down payment or skipping it altogether can lead to issues down the road. Because of how the first year of car depreciation works, loans on new cars can quickly end up “upside-down” without a down payment. You should also avoid dealerships that don’t check your credit at all if you can, as these plans usually come with stringent terms.
Apply for MAZDA Financing in Richmond, VA
Even if you’ve had issues with auto financing in the past, our team at Pearson Mazda will get you going. Drop by our Mazda dealership in Richmond, VA and explore our lineup of new and pre-owned Mazda cars today.
