If you live in Seattle, Tacoma, Bellevue, Bremerton, Silverdale, Oak Harbor, Shelton, Olympia, Mount Vernon, Anacortes, Port Angeles, Centralia, Portland, Vancouver, Ellensburg, Longview, Aberdeen, Bellingham, Spokane, Pullman Washington or any other part of the country you have been affected in one way or the another by the credit crisis. Unsurprisingly, if you have bad credit and is in the market for a car loan you may be a little concerned. Your reaction is perfectly normal. Here are some things to consider when getting a Seattle car loan with bad credit.

The economy is not doing well right now, home prices are tanking, and the stock market is scary. No wonder people are staying away from car-dealer showrooms. And that means it’s a great time to get a bargain on a new or used car in Seattle, Tacoma, Bellevue or any other part of Washington State.

Carmakers have cut production, but they haven’t shut down. Dealers still have to move the cars inventory that roll off assembly lines, so many vehicles are going for near-invoice prices. As icing on the cake, carmakers have turned to low-rate financing and cash rebates.

Vehicle sales for the first three months of 2008 were down 8% compared with the same period in 2007. And incentives are up. For example, GM is spending $3,300 on incentives per vehicle (including cash rebates and subsidized rates and leases), compared with $2,800 a year ago, according to Edmunds.com

Why you should Buy Online

Folks living in Seattle, Tacoma, Bellevue, Bremerton, Silverdale, Oak Harbor, Shelton, Olympia, Mount Vernon, Anacortes, Port Angeles, Centralia, Portland, Vancouver, Ellensburg, Longview, Aberdeen, Bellingham, Spokane, Pullman Washington all have great internet access. Hit the Internet. The Web has a wealth of automobile information that can help consumers know how much they should be paying for a car and what deals they can get. AutoBrag.com tells consumers how much cars are selling for at actual no-haggle dealerships, and shoppers can use those quotes during their negotiation. At Edmunds.com, shoppers have access to information including the automobile’s invoice price and the latest incentive offers. Search on carloan.vg for the latest news on the car financing industry in Washington and all other states. The site acts as a repository of online car articles.

A great place to shop for Seattle car loans is washingtoncarcredit.info which works with a nationwide network of finance companies and dealers to offer a free service focused on helping consumers with special financing needs. The advantage to turning to a site like washingtoncarcredit.info or companies like cardownloan.com for help is that consumers who have already been turned down by dealers or banks have a new opportunity to find the right lender or dealer online from the comfort of their home.

These online car financing services are fast, free and provide an easy no hassle online application. Moreover, your information will be held private, secure and confidential and your loan will be looked over in an instant. There are no fees and or obligation.

Get a Reliable Used Vehicle

The car market in Silverdale or Oak Harbor is similar to the auto loan market elsewhere in Washington. Used car prices have been on a decline for about a decade, so it is advisable to purchase a used car or truck rather than a new one. In addition, new car losses about 15 to 30 percent of their value as soon as they live the dealership, so used cars are a better option finance wise. A reliable used car with great fuel efficiency is the best option. Here are three cars that are highly recommend based on price, maintenance cost, safety and fuel efficiency.

2003 Mazda Protege

• Price range: $6,400 to $7,400.
• Fuel mileage, city/highway: 25/30 miles per gallon.
• Engine: 2.0-liter four-cylinder, 130 horsepower.
• Interior space: room for five.
• Safety: optional side airbags, optional anti-lock brakes.
• Government safety rating: driver, five stars; passenger, four stars.

2003 Pontiac Vibe

• Price range: $6,800 to $9,000.
• Fuel mileage, city/highway: 29/36 mpg.
• Engine: 1.8-liter four-cylinder, 130 horsepower.
• Interior space: room for five.
• Safety: side airbags optional; anti-lock brakes optional.
• Government safety rating: driver and passenger, four stars.

2004 Scion xB

• Price range: $8,900 to $9,700.
• Fuel mileage, city/highway: 30/33 mpg.
• Engine: 1.5-liter four-cylinder, 108 horsepower.
• Interior space: room for four.
• Safety: no optional side airbags; anti-lock brakes standard; traction control standard.
• Government safety rating: not rated in 2004 (four stars for driver and passenger in 2006).

Calculate interest Rates and Options

If you decide not to take an automaker’s low-rate offer, expect to pay 6.8%, on average, for a 60-month loan, according to Bankrate.com. You may do better at some online banks and credit unions, where interest rates are as low as 5% for 60-month loans.

With the economy in limbo, carmakers expect even fewer sales than last year and are not likely to curtail the come-ons. If you want the best bargains along with your choice of options and color, shop before August. After that, the deals improve but selection may be sketchy.

Way the cost of fuel efficiency verses loan amount and interest rates. Remember that during the first five years of owning a car, depreciation makes up about half the vehicle’s cost, fuel is only about 21 percent.

If you in the market for a trade in, bear in mind that the greatest depreciation occurs in the first three years, after that the car costs less to own. Consumer Reports found it often doesn’t pay to downsize if you’ve only owned your vehicle for three years or less and haven’t paid off the loan, even if the new cars fuel economy is much better.

Read the Fine Prints. Be wary of Dealer Options

As a smart shopper, you need to know the common strategies that dealerships use to pad their bottom line—from tricky negotiating tactics to trying to sell you unnecessary extras—and how to avoid playing their game.

The costly extended warranties for new cars are usually poor deals, according to a recent survey in the annual Consumer Reports auto issue. The survey indicated that 66 percent of the more than 8,000 people surveyed said they spent significantly more for a new car warranty than they got back in repair cost savings.

Consumer Reports Auto Editor Rik Paul called extended warranties lucrative for dealers who are currently being squeezed by lower commissions and better pricing information. Dealers can collect, on average, around $800 on each extended warranty sold.

Please don’t cave to pressure: It’s a buyer’s market, so don’t be intimidated and be aggressive in your negotiating, experts said. With fewer shoppers, remember that each customer coming in is more important to a dealer.

One of the greatest resources you can have during your car buying process is the Kelly Blue Book. It will tell you the exact value of you car regardless of the year or mileage spent.

If the salesmen won’t budge and you can’t get the price you want, be prepared to walk away and try another dealership. Don’t pay for extras such as paint protection; dealers often put a huge mark-up on this extra, and you may be better off having it done somewhere else. Here are a few more dealer options to be aware of: CD Changer, Rear-Seat Video Window Etching, Alarm System, Rust-Proofing, Fabric Protection and Paint Sealant.

Get the Best Car for Teens

This year’s number of high school graduates is the biggest since the late 1970’s. Celebrating graduation usually includes a car purchase. The number used vehicle desired by 16 to 25 year old drivers is the Ford Mustang; the number 2 is the Jeep Wrangler followed by Honda Civic.

However, according to the Insurance Institute for Highway Safety, you should not buy these cars for teenagers. The IIHS consistently recommend that teen drive cars that are large, low and slow and are low in maintenance and insurance.

Look for a Mid-size vehicle that isn’t too old and fuel efficient and has front and head-protecting side airbags – as well as stability control. Stay clear away from SUVs and pickups and please don’t buy a sport car or a high performance vehicle.

Are You a Minority? Know Your Rights

If you are a minority in the market for a car loan in Seattle, Tacoma, Bellevue, Bremerton, Silverdale, Oak Harbor, Shelton, Olympia, Mount Vernon, Anacortes, Port Angeles, Centralia, Portland, Vancouver, Ellensburg, Longview, Aberdeen, Bellingham, Spokane, or in Pullman Washington Sate you must be extra careful. On 2004 loans for new-car purchases, blacks paid a median interest rate of 7 percent — compared with 5 percent for white borrowers and 5.5 percent for Hispanic borrowers. On used car loans, African Americans and Hispanics both received considerably higher interest rates. The median rates for African Americans and Hispanics were 9.5 and 9 percent respectively, compared with 7.5 percent for whites.

The CFA found that more African Americans paid auto loan rates of at least 15 percent. For new-car loans, 6 percent of African American borrowers paid 15 percent or more, compared with 1.7 percent for whites and 1.8 percent for Hispanics. On used-car loans, 27 percent of black borrowers and 18.5 percent of Hispanic borrowers paid 15 percent or more, compared with 9.2 percent of white borrowers, the analysis found.

Therefore, if you are a minority, black or Hispanic or from another ethnic background, double check your FICO score. You can get a free credit report from credit.com. Know your rights, do your home work and go to the dealership “armed with information”.

Alternative Credit Score

So we have been talking about bad credit car loan in Washington, but there are some 50 million people in the U.S. who have no credit. Many of them need a car to get from point A to point B, usually from home to work.

50 million people in this country are in the same boat. They have what’s called a thin credit file or no file at all. Many are young people and new immigrants who just haven’t had the chance to establish credit. They just never thought debt was a good idea, did every transaction by cash or they did not have the time to establish credit.

Having no credit is no longer a problem. You can know get on the record. If you have no credit then you can apply for something called Alternative Credit Score.

Traditional credit scores rely on a credit history. The alternative credit score depends on receipts from utility bills, phone bills, rent and other payments. There is a company called Pay Rent, Build Credit, or PRBC that is at the core of the Alternative Credit Score movement. Founder Michael Nathans thought it was unfair that mortgage payments were reported to the major credit bureaus, but rent didn’t count. Now, customers can report all kinds of bill payments. PRBC verifies them and provides the data to lenders.

Test Drive that Baby

Before you buy your car in Washington, check to see if the vehicle fits you. Get into the cabin, adjust the steering wheel, find a comfortable seating position and check your visibility. If you can’t see clearly or if the driving position isn’t comfortable, the vehicle probably won’t be the best fit and safe for you,” said Jon Linkov a car expert with Consumer Reports.

Turn off the radio and roll up the window to focus on how the car drives, rides and handles and don’t let the salesperson choose the test route.

“The salesperson will likely take you on a short ride over smooth, flat roads. Try to take the vehicle on an extended drive over bumpier roads that are more like the ones you drive on a daily basis,” Linkov said. Happy Shopping!

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