I purchased a car a few years ago. Recently my car was wrecked in a car accident, I had no insurance. I am still paying on the car, but I need to purchase another car. I have about $10,000 left to pay on my car, my credit is about 550, I make about 58k a year. I have about $2,000 cash to put towards a car. What do you suppose I do: buy a used car outright or is it possible to finance or lease another car? Please help me. Thanks
It is rare that you can have a vehicle financed and not have insurance, but that said, your best option is to purchase a used vehicle outright and put your payments toward paying off the other loan on the totaled vehicle. Your credit score is low and any interest rate you would get would be higher that the average. During the time you are paying off the other loan, pull your credit report through freecredit.com, find out what is pulling you down and work to fix any delinquent or charged off accounts. If you really work at this by the time you pay off the big loan you could have your credit improved, have a higher score, be eligible for a better rate and will be able to get a car that you really want.
Irregardless of what you decide, do not let your car insurance lapse. In many states if you have an accident and don't have insurance you can lose your license, have your car plates seized and be on foot for a very long time.
〉 Answered on Sep 12th, 2008 by Jessie L Thatcher, F&I and Sales Specialist at Reynolds and Reynolds Company (Retired)