Are you facing constant rejection because of your bad credit history? Do you think low interest rates are only reserved for people with good credit? Do you think that buying a car is just a distant dream for you?
Well, this piece of information can bring you convenience and significantly increase your chances of getting an affordable car insurance. Last month, Reuters published an article entitled “Auto Lenders Relax Credit Standards and Terms to Stimulate Insurances”. It is reported that lenders consider auto insurances to be safe compared to mortgage insurances and credit cards. Also, lenders are now offering loose credit terms due to poor demand for credit. One credit bureau, Experian, reported that the percentage of new auto insurances offered to second-tier borrowers rose 11.4% this quarter over a year ago. This means that people with bad credit can even buy a new car without any problems.
Therefore, getting bad credit auto insurances is now possible. There is no better time to buy the car of your choice. But, are you still not sure about getting an affordable car insurance? If you are still in doubt, take advantage of these strategies and not only get instant bad credit car insurance approval, but also take advantage of the lowest rates possible.
Preparation is the key
Buying a car is a major decision because you are spending your life savings on it. It is an obligation to make regular payments. You cannot go to a dealer without thorough research. So, before you buy a car or apply for a car insurance, here are some important things that require your attention.
Clean your money first
When you want to buy a car, do not just rush to make a decision. You should only sign on the dotted line after you are sure of what you are getting into. There have been cases where lenders have deceived harmless borrowers under the pretext of bad credit.
It is always important to study your credit report before visiting a lender’s office. You can get a free annual copy of your credit report at Annualcreditreport.com. Examine all entries and object to any undue transactions and errors. Credit bureaus are known to make mistakes while calculating your credit score. You can improve your credit by removing all errors. Also, start making your debt payments. Even if you can pay off some of your debt, it will have a positive effect on your credit score. Doing all this takes time and that’s why you should comprehensively plan your car purchase and avoid making a hasty decision.
Down payment to lower your prices
The initial down payment you pay to buy a car can be a useful way to lower interest rates. Making a large down payment of ten to twenty percent can reduce the insurance amount and thus reduce the risk of the lender. Also, the lender will ensure your financial stability. This will definitely reduce the cost of the car insurance.
Co-signer – a convenient idea for the lender
When you have someone to sign for your car insurance contract, the lender guarantees their money back. This is because he can get it from the co-location if you miss payments. Finding a co-location is a bit tricky, but if you can manage one, it will do wonders for your car insurance.
If you cannot find a co-signer, you can take advantage of car insurances without co-signer which come with slightly higher interest rates. However, it is important that you exhaust all of your options before choosing car insurances without a co-location.
Online car insurances for bad credit – a better option
An online car insurance for bad credit gives you the option to get a car insurance without leaving your home. You can apply by logging into your computer. Online car finance companies are an ideal option because banks do not take people with poor credit. To take advantage of money from a credit union, you must be a member of it. When you apply for a car insurance from an online car finance company, you have the option to compare several car insurance quotes. This is not possible when you take advantage of agency funding.
Also, online auto finance companies work with many sub-prime lenders which makes it easier for them to process your auto insurance application. This greatly improves your chances of getting a low interest credit car insurance.
How do you choose bad credit car insurances?
Choosing a bad credit car insurance is easy if you carefully read the car insurance contract. It is imperative that you not only focus on lower interest rates, but instead look at the bigger picture. Calculate the Annual Percentage Rate (APR), which will tell you the interest rate for a full year rather than the usual monthly rate. It also takes into account fees such as insurance origination fees and other miscellaneous expenses that will give you a better idea of the cost of a car insurance.
Check for any prepayment penalty as it can increase your expenses significantly if you decide to pay off your insurance early. Make sure the lender is a reputable name in the auto finance industry.
A little caution can go a long way in securing the best car insurance option. Bad credit is not a problem at all if you know how to deal with it. These important strategies and tips will help you get your car insurance application approved easily.
Remember that bad credit is just your history; It is in your hands to write your future. Get out there and turn your car dream into a reality!