Promises of instant approval, no down payments and low interest rates make it almost impossible to ignore car dealership holiday ads.

Especially, if you have bad credit. While, this might sound like the solution you need to put yourself behind the wheel. It is important to find out if holiday car buying deals will hurt or help you financially.


3 Reasons to Buy a Vehicle During the Holidays


If your auto loan application has been turned down due to a poor or no credit, the end of the year might be the best time to try again.

  1. Automobile sales are typically down in November and December.
  2. Buy Here Pay Here and traditional dealerships are struggling to meet sales goals.
  3. Car lots are trying to get rid of old models to make room for new inventory.

All this combined, often means that they are more inclined to take a risk on buyers with less than perfect credit.

Depending on your FICO score, you might even be able to work out a deal that includes less money down or a lower interest rate.

If you have a trade-in, it can increase your chances of approval.


How Holiday Car Deals can Hurt You


Even with the incentives and advantages, buying a car over the holidays can hurt your credit if you’re not careful. Some pitfalls that you’ll want to avoid include,

  • Purchasing a vehicle you can’t afford. Just because you were approved for a new car, doesn’t mean you have to accept it. Will you be able to make the higher payments on time? What about your other financial responsibilities? It can be tempting to “treat yourself”, but choosing an older, less expensive model can ensure your credit doesn’t take a hit.
  • Not reading the fine print. Not all dealerships fully explain the loan agreement. This could be financially devastating. Be sure to read the entire loan agreement, especially concerning interest rates. The last thing you want is to be surprised when it suddenly increases.
  • Loan agreements that let you skip a month. A month without a car loan payment might sound great, but it can hurt you. The skipped payment will be tacked onto the end of the loan or it could be added to the following month, which means the amount due just doubled.


Before You Go to the Dealership


There are a few steps you can take to ensure you get the best deal on a car loan.

Pre-approved Auto Loans

If it is possible, having pre-approved financing will limit your risk of signing for an auto loan that could hurt your credit. Your credit history and other factors will play a role in determining your chances for pre-approval, but it is worth it to take the time and apply.

Know What You Need

It will be harder for a salesperson to talk you into a vehicle you really can’t afford, if you know exactly what you need. Think about the type. Do you need a sedan, pick-up or is a compact car enough. You also want to consider mileage and model year. Knowing before you go is important, whether you’ve been pre-approved or are looking for a deal.


Questions About Holiday Auto Deals


Considering buying a car this holiday season, but aren’t sure if it is good financially? The answers to these commonly asked questions might help you make the right decision.

Are there different types of deals?

Some incentives often offered at Buy Here Pay Here lots include,

  • Cutting prices on all vehicles. In some cases, by as much as 10 percent. This can put many makes and models in your price range.
  • Rebates are frequently offered by the manufacturer. The only downside is that it is usually only on newer models. Auto buyers with low credit scores often find it difficult to get loan approval.
  • Dealerships often offer lower interest rates on auto financing. Sometimes, regardless of past credit.

Can I save money on holiday auto deals?

It is possible to save money when you buy a car during the holidays. Your credit score will determine how much, and what deals you qualify for. Older model vehicles will often be your only choice, but if the price has been reduced, this could be the ideal time to buy.

Will all vehicles be on sale?

When it comes to most used and older models, they will probably be on sale. It is up to the discretion of the dealership. New vehicles typically won’t be reduced, unless the car lot has a high inventory.

Can I get low interest rates with my bad credit score?

Some BHPY auto loans might approve you for a low interest auto loan, but traditional dealerships probably won’t. If you want to increase your chances of approval, a co-signer or larger down payment can help.

Will insurance premiums be less expensive too?

Unfortunately, the cost of auto insurance does not change because you bought a vehicle during the holidays. It will still be based on make and model, along with mileage. Your driving record will also be factored in. The cost of insuring your new car should be considered, before you buy.


Celebrate with a Holiday Car Deal


The holidays can be the perfect time to buy a vehicle, but you do want to be careful.

Know what you want, and can afford. Carefully read the loan agreement, and don’t be afraid to ask for a better deal. Even though your credit history may exclude you for some offers, there are still plenty of dealerships that will be willing to work with you. Who knows, maybe this holiday season you’ll be able to get the vehicle you need.