Don’t be swayed by that new car smell

Typically, consumers with bad credit will end up with higher interest rates on car loans than those with better FICO scores, but making smart purchasing decisions can offset the extra cost and even help save money.

The most important thing that consumers should remember is to remain realistic. While the shininess of a brand new car may be enticing, it just isn't necessary when you are strapped for cash and trying to improve your credit. Opt for what financial analyst Suze Orman calls a "new used car," one that is just a couple years old and is great shape.

Drivers can get a great deal on these gently-used vehicles because new cars automatically lose 20 percent of its retail value as soon as they are driven off of the dealer's lot, according to Orman's "The Money Book for the Young, Fabulous & Broke."

To avoid being sold a lemon, make sure the car you are looking at is Certified Pre-Owned (CPO). The source emphasizes that the certification should come from the manufacturer itself, not the dealer, which offers a far stronger warranty.