Unfortunately, my wife and I have never had the luxury of purchasing a new car just because we were ready to purchase a new vehicle. We have always had to buy our cars because one or both of our current vehicles had broken down beyond repair. Before we experienced financial trouble due to medical expenses, we could easily finance a vehicle.
However, because we are still recovering financially our credit score is still a little too low to get the best interest rate possible for a car loan. Therefore, we have had to become creative in finding a way to finance or purchase a vehicle now that one of our cars is beyond repair.
There will be times when you need to replace a car quickly and do not have time to find ways to save money for a car. For those facing the reality of how to buy a car when you cannot get a conventional car loan, the following suggestions may help you find the money you need to replace your vehicle.
Credit unions – If you belong to a credit union, meet with a representative and discuss options for financing the purchase of a vehicle. Often, credit unions will work with members more than a traditional bank to help members get lower interest rates and monthly payments. They can also work with members who may not have stellar credit reports.
Second chance loans – Even if you have a bad credit score, you can always submit an application for a loan online. They are approved very fast and you can get $100 – $5000 on the next business day. There are many established websites offering such a service. And the best part is that you can use the money the way you want. Continue reading here – https://www.elcloans.com – second chance loans.
Buy-here-pay-here businesses – These car dealers usually only have used vehicles but promise to sell to anyone no matter what their credit score reveals. Consumers must be careful though because some of these businesses are not reputable and will hide costs and fees in fine print or offer vehicles that are not in good repair. Read the entire contract and have the vehicle checked by your own mechanic before signing a contract.
Borrowing from life insurance cash value – Although this may not be what you want to do it may be better for you than financing a vehicle. Depending on the terms of your life insurance policy, you may be able to borrow against the cash value or withdraw the cash value. The result will affect the death benefit differently so make sure to discuss this with your insurance agent before proceeding. However, this may be a great option for those who cannot qualify for a car loan.
Borrowing against retirement accounts – This is probably one of the most common ways people get the money they need; however, this is not recommended. Your retirement account should be for your retirement and you should avoid using the funds for anything else. With that said, there may be times when borrowing from your 401k account to buy a car is a good alternative to other financing options. For a couple who is in their 30s or 40s, have bad credit and are not planning on retirement for another 20 years or more, a loan against their 401k account may be their only option to purchase a vehicle. At least they will be paying themselves back the interest on the loan rather than paying it to a lender.
Find a co-signer – If your credit score is low or you do not have a strong credit history to qualify for a loan, having a co-signer may be the answer to your vehicle problems. However, for the co-signer, they are taking an enormous risk because if you default on the loan they are responsible for the balance owed on the loan. A co-signer must be very careful not to destroy his or her own credit by trying to help a friend or relative.
Sell items you can live without – Sometimes you have to sacrifice some things in order to do what is best for you, your family and your personal finances.
You may love your golf clubs or be convinced you cannot live without the strand of pearls your grandmother left you that are locked in a safe deposit box. However, consider how you will get to work, take your children to school and function without a vehicle.
Sometimes selling items is a last resort but has to be done in order to survive.