Life gets tough sometimes, especially when your car breaks down and you are not prepared to buy a new one right away. Fortunately, there are ways for people to go about buying a car with bad credit. These include getting a co-signer, putting down a larger down payment, and finding alternative lending options.

One’s credit score is never set in stone. There are ways to boost your buying power and your credit score. Even if you need a new vehicle promptly and don’t have time to improve your credit rating, there are ways to get around low credit without needing an extortive loan.

Read on to learn about how credit affects your purchasing power and also how credit affects your auto insurance policy rates.

Get a Co-Signer

One way to get around poor credit when purchasing a car is to get a co-signer on your auto insurance policy. Essentially, a co-signer will be obligated to pay for the car loan if you are unable to do so.

Your co-signer won’t affect your insurance rates directly, and they technically don’t have to be on the insurance policy unless they are named on your title. However, if you have a co-signer for your loan, they can also be on your insurance.

Co-signers should be on the insurance policy if you have a shared living situation with them, if they have vicarious liability for damages incurred, or if they occasionally or regularly drive the vehicle.

The co-signer is also responsible for making sure that insurance payments are met, which is another reason it’s a good idea for them to be covered by the policy.

For co-signers to avoid unnecessary or unexpected liability, they usually should add a clause to the original contract that gives them the right to take possession of the vehicle if the primary owner can’t make payments. This means that if they are required to pay for the vehicle, at the very least, it will be in their possession.

Co-signing is not the same thing as co-owning. While the co-signer may have the ability to take the car if the primary owner defaults on payments (leaving them responsible for repayment), the co-signer doesn’t own any part of the car unless their name appears on the title.

Be sure to check with your local DMV for lending requirements and restrictions where co-signers are concerned.

Make a Bigger Down Payment

Credit is mostly important if you need to take out a loan to buy a car. Therefore, the less of a loan you need, the more likely you are to be approved, even with bad credit.

It is possible to get a loan with bad credit, but the interest rates will often be much higher than they would be otherwise, forcing you to spend even more money over a long period of time. In addition, higher interest rates may make it more likely that you will default on your loan, further tanking your credit.

However, if you can save up enough money to make a bigger down payment, your loan obligation will be much smaller. Low down payments can make up for higher interest rates, taxes, and fees. The size of the loan you qualify for may limit your ability to choose a vehicle, so putting down more money also increases your options.

To make a more significant down payment, You need to budget and not go over what you can afford. Buying a car and using all your savings is dangerous, especially if you don’t know whether you will be able to maintain payments.

Check your budget and see what you can afford to cut. In addition, try to get preapproved for a loan. If you get preapproved, it’s easier to find lenders who will work for you.

Get an estimate for what your monthly payment will be. Start cutting that amount from your budget early, and save the excess to add to your down payment for a few months. That way, when it comes time to get your vehicle, you will already be used to going without the monthly payment money. In addition, you will have some money saved to add to your down payment.

Find Alternative Lending Options

If a regular lender isn’t working out for you, there are alternatives. Nonprofit agencies are often willing to provide loans or even a full car to those with low incomes. Check and see if your state has any nonprofits that provide loans.

Some car lots also have on-site financing with low or no credit checks. However, these options can be pricey, and the vehicles offered can be of lower quality. You will want to research the dealership thoroughly before committing to a purchase. Make sure you take the time to research the vehicle’s history as well.

Sometimes, traditional lenders will work with buyers who can prove their trustworthiness in ways other than through credit, such as with income and other factors.

Prospective buyers should also be on the lookout for scams. Many people try to take advantage of car shoppers who have low credit with predatory scams and payday loans. Remember that any loan you get has the potential to destabilize your credit further, so make sure you read your agreement carefully and make sure the paperwork matches what you verbally agreed to.

Finally, there are always ways to improve your credit if you are willing to put some time and energy into it. Boosting your credit trustworthiness will help you qualify for more loans and lower rates. Even if you don’t have time to do it before you get a new car, you can start to improve your credit now for future purchasing power.

Do your research on lenders and take whatever time you need to make your decision. Poor credit does not need to make or break your car-buying ability. It simply means you may have to find alternative approaches to financing. Look into finding a co-signer, putting down a higher down payment or getting an alternative lending entity to help you finance.

Anyone can buy a car, regardless of how low their credit score is.

About The Author: Deborah Goldberg writes and researches about vehicle safety and insurance for the auto insurance comparison site, AutoInsurance.org. She is passionate about consumer protection and legal transparency for car owners.