Navigating the world of credit proves to be difficult for everyone. Having too little often means we get rejected for financial products based upon the fact that we have no repayment track record. Conversely, having too much can mean we get penalized for not showing we are able to live within our means.

More specifically, credit can sometimes be a helpful device or a great way to obliterate your finances.

If you are looking to get a car loan then rules are no different. Lenders will always take a positive view of you if you’re able to show a responsible repayment track record. On the other hand, you should only take out car finance under very specific conditions, and if any of these conditions apply to you, think twice about financing car!

You have a poor or adverse credit rating. Would you pay thousands of dollars in high interest payments just because you have performed one or two late payments? Almost certainly not. Saving for your next car purchase instead of obtaining credit would save you a bucket load of cash. And if you need a car in a hurry and are not in the position to save up the money in time, then ensure you pay off that loan as soon as physically possible, otherwise you will be flushing your money down the toilet.

It’s An Old Car. Dealership financers are notorious for pushing dirt-cheap financing terms onto otherwise ignorant consumers. Why is this, you might ask? Simple: old cars break down faster, but you’ll still be forced to pay off the loan, even when you can’t drive the car. Feel like paying two car loans for the price of one car? Didn’t think so – so do yourself a favor by not financing a clunker or a car that’s more than four years old, especially if the life of the loan extends longer than two years.

It’s An SUV. It’s no top secret that SUVs are quickly falling out of fashion in the auto world. They’re big, clunky and let’s face it – they’re not too easy on the wallet either! Don’t finance an SUV, since you’ll be paying more in interest than what it will be worth in another year or two. Be smart and buy a gas-efficient car; now that’s worth the investment.

Some Car Manufacturers are on the verge of bankruptcy. Unbelievably, some car manufacturers could be out of business within the next 12 months. As a consequence, they are anxious to sell their cars to say afloat. But watch out, if your Automaker goes bust, you could find that your warranty may not be guaranteed. Take time to research your chosen manufacturer’s state of health, and avoid financing the vehicle at all costs.

In summary, help yourself by buying a car that fit’s your budget or that can be paid off within a couple of years – you will be financially better off for it!