Anyone with bad credit knows how hard it is to get a loan for anything, let alone a big-ticket item like a car. But today people with bad credit and even bankruptcies on their records can still get an auto loan. This is a valuable service offered by both car dealerships and auto financing companies. So what's the secret to getting an auto loan with bad credit? Well, we should all know that car dealerships have two prices for any given vehicle - the so-called dealer invoice price and the sticker price, right? The actual price of the car refers to what we call the dealer invoice price, which is what is often hidden from the buyer and is the key to getting the best deal.

When you find yourself wanting to get a new or newer car with poor credit, you face two hurdles. First, you need to be aware of the lowest price that you can expect to pay for the car. As someone with bad credit, this is more important than you think because without this information, you will have no bargaining power as to the price and risk paying much, much more than someone with pristine credit. The second issue you face will be to get an auto loan with bad credit.

By applying through a car dealership for an auto loan with bad credit history, you can get the car of your choice and the good thing with this avenue is that the dealer is highly motivated to get you to sign on the dotted line and will work with you to meet your monthly budget. But you'll find that as you begin looking at the actual numbers, the sales price suddenly became higher because the dealer just marked up the interest rates that you are going to pay.

So while your monthly payments might seem fit into your budget, what the dealership has done is effectively stretched out your repayment period and tacked on additional interests and fees to offset some of their risk of giving an auto loan with bad credit. As long as the rates are not usurious, it's perfectly legal in most localities, just not very savory. Unfortunately, many people with poor credit think this is the only chance they'll have to get an auto loan with bad credit and own the car that they want, so they heave a sigh and sign those papers.

Keep in mind you can bargain for a more reasonable price on the car itself and then negotiate payment terms based on your capacity and capability to meet your payments. With the tough competition among car dealers today, the majority of them will fight for your business which means that each will do his best to give you a better price than the other - something you can use to your advantage. So put your bargaining power to work. Bottom line is, even if you have a bad credit and will have to pay higher interest rates, you can still find a great deal for a car.

What works even better for some individuals is to shop for an auto loan independently from the car shopping process. Sometimes a credit union will help you, but quite frankly, traditional banks won't be interested in your business. However, there are plenty of auto lenders or car financing companies that can help you regardless of your credit history. The interest rates can vary from lender to lender, so you really need to obtain several quotes and analyze the terms to ensure that you can get the best deal possible.

So what do you need when applying for auto loan with bad credit? You will definitely need to have your credit report ready. If it is way below "good", then you need to see if there is anything you can do to bring your score up. Credit reporting companies can make mistakes and they have no way of knowing this unless you bring it up. Challenge anything that doesn't look right with your creditors and make sure your records are accurate.

Be ready with proof of income such as your pay stubs. You'll also need a valid driver's license and proof of insurability. With this information in hand, you'll be able to breeze through the application process itself. To save even more time and avoid potentially embarrassing face-to-face applications, consider using online auto financing. With a single push of a button, you can get quotes for an auto loan with bad credit and even be approved nearly instantly so that you get on with the business of shopping for your new car.