Buy a car with bad credit

• 1). Buy used. The hard reality is that, with a low credit rating, you might not be able to get the car you want. You might not even be able to get a car you like. Shop around for a vehicle that is dependable and efficient, and that you can afford. You don't want to end up defaulting on another loan.
  
  
• 2). Find a co-signer, often a parent or other family member, who agrees to pay off your car if you fail to make payments. Many loan companies will agree to give you a loan if you can find a co-signer with a great credit rating. This also can help you get better terms on your loan. But if your co-signer ends up making payments for you, it can harm your relationship as well as your credit rating.
  
  
• 3). Buy from an individual. A personal transaction will put you into a car, sometimes even without interest. However, if you can't pay the entire price of the car upfront and you and the previous owner agree to payment terms, be sure to put everything in writing to protect yourself. The downside to this method is that it does nothing to help rebuild your credit.
  
  
• 4). Shop around for direct finance car dealerships. Many people with poor credit turn to dealerships that claim to finance everyone. This often is true, although dealerships that offer direct financing to people with shaky credit usually do so at a price. Interest rates on these loans can be 20 percent or higher, and the price of the cars sometimes is inflated. If you choose to go this route, shop around for the best rates, and read and understand your contract fully.
  
  
• 5). Fork over a big down payment. This might make you more attractive to lenders because they will consider you more likely to be able to pay off the remaining balance. As an added bonus, you will save money in the long term because you will end up paying less in interest.
  
  
• 6). Try a microlender. Microfinance is gaining popularity as people try to avoid the high rates and other costs associated with big financing corporations. Microlending works by pooling lenders who agree to short-term (usually around three years) loans to people of varying credit ratings. People who have difficulty getting conventional financing can try to get a personal loan through websites like Prosper.com. Making regular payments on these loans can help repair your credit rating.