Bad credit does not have to be a deal breaker.

Is getting an auto loan with bad credit even possible? If you have had some setbacks, it can be disheartening to realize bad credit can be an obstacle when you need a car loan. The good news is that it is possible, and potentially even easy, to get a car loan with bad credit. As is the case with any financial purchase, though, you will have to shop smart. Here is how.

Know Your Score

Every calendar year, you can request a copy of your credit report, including your score, from the three major credit bureaus: Equifax, Experian, and TransUnion. Your credit score is simply what these bureaus believe to be the level of risk. The lower your score, the less likely you are to be seen as being able to make good on the debt. Anything below 620 is considered “bad.” So, get your score, so you know what lenders will see when they run your credit.

Shop Around

While it might be tougher to find a lender when you have bad credit, you have an advantage. A car is a tangible asset with value, and an auto loan is secured by that value. This means that banks may be more willing to give you a loan because, if you cannot make the payments, the bank can take the car and sell it. Obviously, you do not want that to happen, but for the bank, having that extra security makes lending more likely.

That said, do not accept the first quote you get. Shop around and try to find an interest rate that is as low as possible. It likely will still be fairly high, but it is worth looking for the best rate you can possibly find.

Think Practically

Look closely at what you need out of a car. Would a late-model used car make more sense than a new one? Will you be moving a lot of people or cargo? Will you use this car for work? Practical thought will go a long way toward helping you get the car you need.

Bad credit just means a bit more math to get a car.

Do The Math

Dealerships and lenders can massage the numbers to make a loan look good in a number of ways. For example, one of the more popular techniques has been to extend the term of the loan, that is, how long you make payments. Pushing a five year loan to six, seven, or even eight years is no longer a rare thing, but, ask yourself, will you still be driving this car six years from now? How much will that longer term cost you when it comes to interest and repair bills? How much will your car be worth with a decade of miles on the odometer? Think carefully about your long-range plans for the car.

Be Skeptical

Remember to thoroughly investigate the dealership with which you are doing business. Sadly, there are unscrupulous dealers who may try to take advantage of your poor credit to charge more than is necessary for your car. Ask friends and family what they have heard about dealerships and lenders, and look them up online to see what their reputation is. If something seems wrong, or if you do not like what you are reading in the agreement, then do not sign the contract.

While it may be a bit more difficult to obtain a car loan with poor credit, it is by no means impossible. Ready to start shopping? Start with the research from CarFoundMe today.