Reality Check: Why the Car You Need Might Not be the One You’ll Love
If you’ve had a history with bad credit, you’d probably like to see the days of getting rejected for auto financing end – for good. There are memories you most likely want to forget. And now that you have options, in the form of subprime car loans, you may feel that it’s time to erase those days of financial struggles from record, and fill the present with good things. So you might envision yourself buying a fancy sedan or sporty coupe with financing. However, you need to keep in mind that a car loan for people with bad credit is specialized. The purpose isn’t to get you into the car of your dreams, but rather, they’re meant to get you into a car and eventually will heal your credit “wounds”.
Kings & Princesses
Too many individuals who are in the subprime market hold onto their goal of owning their dream vehicle. There’s nothing wrong with that. The problem comes when they get approved for a subprime loan, and then expect to buy a car that is out of the ideal price range. When a lender or credit specialist informs them that this particular vehicle isn’t the right choice, they may get irritated, or even cranky. But the credit specialist isn’t doing this to make them feel bad or “crush” their dreams. Subprime lenders that are truly working on your side, are more concerned about helping drivers gradually flee the difficulties of living with bad credit.
Wants vs Needs
The struggle for drivers with poor credit boils down to the ever-constant divide of our needs and wants. Here in the Western world, it’s even more challenging. We’re bombarded with advertising, social expectations and cultural influences that inflate our egos (stressing us out in the long run). But those same pressures and desires from the outside world are the same reasons why people fall into debt and bad credit in the first place. They overspend to fit in with a certain group or impress others. With subprime loans, however, lenders don’t focus on getting you a car that turns heads. The focal point is not only giving you the freedom to drive, but also, to prove to future lenders that you are trustworthy with loans.
Performance vs Affordability
Traditionally, an individual might look for a car touted for its performance. Maybe it’s loaded with horsepower, wins awards for its fuel economy, and has handling like no other vehicle. It’s a car junkie’s dream. However, that should be second thing on the mind of a driver with poor credit – affordability should come first. After all, what good is the the $75,000 sports car going to be if you’re struggling to make payments, and further damaging your credit. If your credit isn’t the greatest, it would be much more beneficial for you to choose a vehicle that won’t strain your monthly budget.
Status vs Reliability
As mentioned a few sections ago, ego gets people into trouble. You might have had conversations with people who bug you about the milestones you haven’t achieved yet, or the mismatch between your job title and the car you drive. Because of this, you might feel compelled to buy a car that you’ll wish you never bought (because the payments are too much). If you have less-than-stellar credit, it’s better to put your ego aside (at least for now), and focus on improving your finances.
Remember, there are too many people out there who are impressing their friends and family members, but spend their personal time worrying how they’ll pay for such a lifestyle. An auto loan company offering subprime rates will most likely offer you a vehicle that’s reliable, not only in terms of performance, but pricing as well (in other words, affordable).
A Loan that Sets You Free
So where do you stand? Are you a driver with poor credit who needs a subprime loan, but want’s the perks of prime financing? Are you looking to get behind the wheel of a luxurious ride despite having little or no credit? If so, you need to find a balance and be willing to compromise. Look at your loan not as a necessary evil, but rather, a tool for getting yourself in a healthy financial state. In other words, allow the state of your credit, along with the help of a credit advisor to dictate the car you should buy, not your desires.
The Right Car Helps You…
- …Work towards building good credit – A car loan itself won’t bolster credit, but it can help you do so indirectly – as long as you don’t miss payments. A subprime loan is like a second chance that prime lenders won’t give.
- …Eventually get out of subprime territory – With patience and perseverance, you can eventually walk out of subprime territory, and closer to prime financing. Of course, you need to make loan payments without missing them or being late. Also, the faster you can pay it off, the better.
- …Builds trust among lenders – Ultimately, your goal should be gaining the trust of lenders in the future. In addition to looking at a subprime loan as a second chance, look at it as a means to prove that you are indeed a customer who deserves to be financed when necessary.
Here’s the kicker – the car you want may be a reality, but not right away. Remember the phrase, “paying your dues.” Many people have lifted themselves out of bad credit, and have gone on to buy better things with their money. The same could be true for you. But you have to start somewhere, and using a car loan for bad credit can be a good place to begin if you allow it.
Eyes on the Prize
Don’t allow yourself to become downhearted because of your circumstances. They don’t have to last forever. At the moment, a credit advisor may recommend that you choose a car that’s not the one you want, but the vehicle they do suggest is more likely to be one that you can afford. And that’s the key. A car that will put no strain on your monthly budget is a keeper. If you can make payments without any struggle and can do so consistently, you’ll start moving towards a better credit score. In time, you might be able to get a car that’s a treat, rather than a tool.