Most people put together a wish list of sorts before they head to a car dealership to buy a new set of wheels. It depends on your priorities, but you’re probably searching for a car that meets a few requirements, including cost, vehicle type and fuel economy.
Here’s another thing to research: Does your desired car match up with your credit score? Assuming you’re planning to take out an auto loan to finance your new car, you’ll need to know your credit standing, because you’re more likely to get approved for a larger loan amount and lower interest rates if you have good credit.
If you’re planning to buy an expensive car with little money down, you’ll want to go into the dealership with an impressive credit standing in order to improve your chances of getting approved at an affordable rate. Conversely, if you don’t have great credit, you may need to look at less expensive vehicles.
For example: The suggested retail price for a 2013 Dodge Avenger is just under $20,000, according to Kelley Blue Book. The average credit score of someone who finances a new Avenger is 619, according to data from Experian Automotive. That’s considered “poor credit” on the VantageScore 3.0 scale, which ranges from 301 to 850. People who financed new Avengers had the lowest average credit score of any other make and model in 2013.
Low credit scores aren’t necessarily tied to low-cost cars. A 2013 Nissan Versa is the lowest-priced new car out there, according to Kelley Blue Book, starting at just under $12,000, and its drivers have only the fifth-lowest average credit score of new-car buyers. The credit score-car model relationship could also be a result of different financing standards set by various automakers. The reason behind the correlation isn’t clear, but the information could be helpful for people with poor credit looking to finance new vehicles.
5 Cars Popular Among People With Poor Credit
This data comes from Experian Automotive and covers new car sales from 2013. The credit scores are on the VantageScore 3.0 scale.
- Nissan Versa — 657
- Kia Rio — 656
- Chrysler 200 — 651
- Kia Forte — 650
- Dodge Avenger — 619
Scores between 600 and 649 are considered “poor,” and those between 650 and 699 constitute “fair credit.” You should have an idea of your credit standing before applying for a loan, and you can check two of your credit scores for free every month on Credit.com. If you’re concerned your credit isn’t good enough, you can make a plan to improve it, but you’ll never know what needs work if you don’t check.
More on Auto Loans:
- Are There Car Loans for People With Bad Credit?
- What to Do If You Can’t Make Your Car Payments
- Top 5 Worst Car Buying Mistakes
Image: Digital Vision