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Used car loan options for bad credit

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Hi guys,


I'm sure this has been asked time and time again, but I've read the first several pages of this sub-forum and haven't found it yet.  Please don't skewer me if I overlooked it.  I've found myself in a position where I need to buy a new (to me) used vehicle and I have no idea to begin where to look for financing.  A little history to understand what boat I'm in and how I got here (for whatever it's worth).


Six or seven years ago my wife got a serious case of the grass being greener in someone else's pasture which ended up in a very long and drawn out (and terribly expensive) custody battle.  By the time the dust settled I had primary custody of our son, refinanced our house into my name, had literally $18 left in savings, maxed out credit cards and no more health insurance.  Being in my early 40's and overall healthy I decided to take my chances with no health insurance and put that money toward paying down my debt.  In hindsight that wasn't the brightest idea because a couple years later I was diagnosed with testicular cancer.  I'm self-employed and thankfully a number of my customers are medical professionals, so I started calling in favors like there was no tomorrow.  Once all was said and done, several chemo treatments and one surgery later I was cancer free and broke as a joke.  I ended up with maxed out credit cards once again in addition to several pretty hefty medical bills. I started making payments on all the different medical bills I had coming in and did OK for a while, but it finally became more than I could handle and I slowly started sinking.  World's Foremost Bank sent me a letter saying that they had decided not to renew my card (which was maxed out) because of information on my credit report, which I can only assume to be either one of the medical bills that went to collection or the terribly high credit utilization ratios.  Regardless, I continued paying for another couple months before I had to make some tough decisions.  By that point I didn't have enough coming in to pay everything so decided to continue paying those people who had worked with me, so that one went to collections.


Fast forward to today.  I am still self-employed and getting by ok, but still have very high balances on my credit cards.  I had also gotten a payment or two behind on my mortgage but have worked out a payment plan with them to be caught back up by July.  I haven't had a car payment in probably 15 years and had intended to just keep plugging along with my trusty old Ford Explorer until I'd dug myself out of this hole in which I currently find myself.  Apparently Mother Nature decided she had different plans for me a few weekends ago when some storms rolled through and I ended up with a huge tree limb on the car.  It hit right at the top of the windshield which shattered the glass and pushed the roof down enough that just buying a new windshield is out of the question.  So I now find myself in a position of needing another car and having horrible credit.  I've never been in this position and quite frankly have no idea where to go from here.  


I have looked around online and see a umber of lenders who "guarantee 100% credit approval" but it seems that the majority of them will only finance a purchase through one of their network of dealers.  There is a nice used 2007 Explorer at a small car lot near my shop that I would very much like to buy, and it's very reasonably priced at $7000.  I'm interested in this car in particular because it's clean, reasonably low mileage for the age and it's something that I believe I can make last for at least another 7 or 8 years (barring any more gifts from Mother Nature!)  I know that I'm going to be stuck with an astronomical interest rate and I'm OK with that for the time being, but I just don't have a clue how to move forward.  Any help you guys could give would be appreciated more than you can possibly know.




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If you have impaired credit I believe you should go to a dealership that has the resources all in one place to help you.  Be prepared to document your income.  And you will probably need somewhere ~2,000.00 for a downpayment.  Total loan not to exceed 10,000.00.

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As noted, let a dealership be aware of the situation.  They have people they can work with if something can be done.  The online 'guaranteed approval' stuff just bounces you around and makes a mess of the report AND can hamstring the dealer.


Other options are to go through your small local banking institution and let THEM tell you what they will write a note for...you then shop within that limit but have the equivalent of a guaranteed financing deal already in place. 

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