Sports cars are extremely expensive. If you are looking to buy one, you must be from a well-to-do family. Paying about €50,000 out of your pocket will not be a problem. However, sometimes you may find that your budget is a little shaky and therefore, you may have to take out car loans in Ireland. You can borrow money from a direct lender or a car dealer to fill the gap in your savings.

Your credit score must be good to qualify for the best car loan deal. Car loans involve certain formalities and paperwork. They are not as quickly processed as emergency loans. Your lender will carefully examine your past payments and overall financial condition before signing off on your application.

Car loan lenders and car dealers both have their own criteria for deciding whether to approve your application and how much interest rates to charge. Despite a good credit rating, you may end up getting high interest rates because your overall financial situation may not seem satisfactory at all.

Finding the best car finance deals in Ireland involves a lot of research. You should carefully compare interest rates between dealers and lenders and then choose a deal. Getting a prequalifying offer can help you. Actual rates will vary, but they may let you gain insight into how much it will cost you.

There is a possibility of buying a sports car with a bad credit score

Ideally, your credit rating should be stellar if you are looking to get the best deal. Even if your credit score is fair, you will struggle to get a car loan at affordable rates. You will be refused the most attractive deals if your credit rating is fair. A fair credit report is much better than a bad credit file. It means you slipped up making a few payments in the past, but your overall track record is not so bad.

You cannot get the most affordable rates when your credit rating is fair, let alone you get it when your credit score is bad. You should always try to maintain your credit file in good condition. Before you apply for a car loan, you should always try to check your credit report. You can get a free copy of it from credit reference agencies.

Your bad credit rating will not be problematic for you if you are borrowing a small amount of money to fill the gap in your savings. A lender will not find you a risky borrower because of the small amount of money, but if you are borrowing money for a larger sum, you should have a good credit rating.

Here is how you can maintain a good credit rating:

• You should remain at the same address for at least one year. Switching addresses frequently will work against you. You will not be considered reliable if your credit report has a string of addresses.
• You should maintain steady employment. Job hopping is not a good idea. Your lender will find you risky if you switch between jobs too frequently.
• Open a bank account. You cannot get the nod for a car loan if you do not have a bank account. You must have the one to make payments.
• Optimize your debt utilization to improve your credit score.

Ways to get your car financed with a bad credit rating

Here are the ways how you should get your car financed with a bad credit rating:

• Get a loan through the credit union

Credit unions are more lenient than banks and direct lenders. If you are already a member, you should inquire about loans there. Chances are you may get a lower interest rate. However, it depends on the total sum of money you want to borrow. Sports cars come in luxury. They are extremely expensive. Of course, if you are looking to buy it, you are supposed to have enough money.

Credit unions can help you meet the gap in your savings, but if you think funding up to 80 to 90% of your car’s value will straightaway turn you down.

• Seek out a loan through the dealership

Credit unions cannot be an ideal choice if you want to borrow a large amount of money. You should rather consider deals available by dealers. Car dealers may approve your application even if your credit rating is bad. Some dealers may allow you to get a deal with no down payment, but in both circumstances, you will get high interest rates.

Dealers specialize in used cars and bad credit financing, so your chances of getting approval despite a poor credit rating are very high. You can apply to a car dealer online or in person. You can get approval on the phone. The decision is made within the same day you apply for it. It is always advisable to get an idea of your approval chances before shopping.

Because sports cars are expensive, dealers may expect you to put down a larger deposit. They will mostly be willing to fund 40 to 50% of the sticker price. Get this information beforehand so you do not get ugly surprises after applying for a loan to them.

• Explore options through sub-prime lenders

Car lenders may offer you better deals than car dealers. Dealership financing is particularly known for hire purchases and personal contract purchases, which do not seem to be suitable for financing sports cars. Various direct lenders are out there known for providing car loans to subprime borrowers.

You can submit your application online, and the decision will be made on the same day. Most of the lenders accept applications from bad credit borrowers. However, they will charge higher interest rates and expect you to pay down a larger deposit.

Bear in mind that interest rates vary by lender. You should carefully examine auto rates before applying for a car loan formally. The interest rates can be high because of additional fees. Make sure you do not choose a lender that offers a very high interest rate. Compare rates carefully and then make a decision.

The bottom line

Buying a sports car with a bad credit rating can be slightly challenging. You may have to arrange a larger deposit size and yet you will be imposed a high interest rate. Sports cars are extremely expensive, so your lender will find you a risky borrower.

You should try to get money from subprime lenders. Compare their interest rates with rates from car dealers and get a deal that suits your budget.