Can You Finance Tires With Bad Credit?
Don't let bad credit stop you from getting new tires. Understand financing possibilities and smart acquisition methods to keep your vehicle safe.
When a vehicle needs new tires, limited financial resources or a challenging credit history can create a significant obstacle. Unexpected maintenance, like replacing worn tires, often becomes an urgent necessity. This prompts many to explore financing options, even with less-than-ideal credit.
Financing Options for Tires
Lease-to-own or rent-to-own programs allow immediate possession of tires through regular payments. While accessible, the total cost often exceeds the cash price due to fees and interest. Missed payments can lead to repossession, with prior payments forfeited.
Some tire retailers offer in-store financing or branded credit cards. Approval criteria can be more lenient than general credit cards, though a credit inquiry may still occur. Terms, including interest rates and promotions, vary widely and should be reviewed.
Specialized lenders offer personal loans for tire purchases, even with less-than-perfect credit. These loans provide a lump sum but come with higher annual percentage rates (APRs) than traditional loans, typically 18% to over 35%. Repayment periods range from a few months to several years.
Secured or subprime credit cards can also be used. Secured cards require a cash deposit, making them easier to obtain with lower scores. Subprime cards are for poor credit, generally having higher interest rates, annual fees, and lower credit limits. The credit limit might not cover a full set of new tires.
Important Considerations for Financing
Before committing, calculate the total cost versus the initial cash price. This includes all scheduled payments, administrative fees, interest, and potential late penalties. For a $600 set of tires, a lease-to-own agreement might cost $900 to $1,200 over 12 months.
Annual Percentage Rate (APR) and various fees influence the overall expense. APR represents the annual cost of a loan, including interest and other charges. Application, processing, and late payment fees can add 5% to 15% or more to the principal. Review all associated charges before signing any agreement.
Repayment terms, including length and frequency, affect total cost and monthly budget. A longer period means lower monthly payments but a higher total paid due to accrued interest. For example, extending a loan from six to 12 months could increase total interest by 20% to 50%.
Taking on new debt can affect one’s credit score. Timely payments can build stronger credit. Missing payments or defaulting negatively impacts scores, potentially reducing them by 50 to 100 points, making future borrowing harder.
Distinguish between true “no credit check” options and those accepting bad credit. “No credit check” options, often lease-to-own, rely on income verification but carry high effective interest rates. Options accepting bad credit perform a credit check, assigning higher rates based on risk.
Alternative Tire Acquisition Methods
Saving a portion of the cost over time can be a practical alternative. Setting aside $25 to $50 weekly or bi-weekly can accumulate funds for tires within months. This avoids interest and fees, allowing payment of the cash price.
Purchasing used tires offers an affordable, short-term solution. Used tire shops and salvage yards have selections with varying tread depths. These tires provide a cost-effective way to maintain vehicle safety for a fraction of the price, typically $30 to $70 per tire. Inspect used tires for damage before purchase.
Some independent tire shops might offer informal payment plans directly to customers. These arrangements are less common for new tires but a local shop might work out a direct schedule. Such plans involve a down payment and installments, without formal credit checks or high interest. Inquire with trusted local businesses.
Exploring local community resources or assistance programs may support vehicle maintenance. While specific tire programs are rare, some non-profit organizations or aid groups offer broader financial assistance for transportation. These programs often have eligibility requirements based on income or circumstances. Investigate available local aid.