Consumer Car Buying Advice Blog

If you are applying for a bad credit car loan, there are a number of things you can do to make the process go more smoothly…

Apply for your loan online

While this may sound self-serving, many of us at Auto Credit Express have talked to customers who visited a local dealer and were turned down for a car loan. In most cases, this was due to the fact that the dealer just didn’t want to get involved with bad credit customers. A special finance department requires a lot of time and effort as well as the right kind of new and used inventory that many dealers aren’t willing to commit to.

When you apply for a loan at Auto Credit Express, we will assign it to our nearest affiliate dealer. These are dealers that specialize in bad credit financing and take the time to study your application.

Fill out the application as completely and accurately as possible.

You may find that our loan application is longer and more thorough than anything you have filled out before. There’s a reason for this: the more information that the dealer has, the better they can match you to one of their lenders – in order to get you the best deal possible. It’s important that you are totally honest and upfront with all your information. Since bad credit car lenders usually check this information themselves, it is important that the information you furnish is as accurate as possible.

In addition, once they receive the application, they will be contacting you to go over the information and possibly to ask you some additional questions. The special finance manager does this to get the “rest of the story”, if there is one, from you. Many times customers have had medical problems, family health issues or other events that caused their credit problems. Knowing these issues will help them explain your situation to the bank.

Have your supporting documents available to take to the dealership.

In addition to checking on the accuracy of your application, most subprime lenders will require that you furnish them with documentation proving your income and residence. These “stipulations” can include utility bills, phone bills and paycheck stubs or W-2 forms. It’s a good idea to have all this information available and ready to bring with you. If you are claiming child support or disability income, it will probably be necessary to have the court order or the award letter to prove the income.

Keep your car expectations reasonable

A bad credit car loan is designed to repair your credit, not get you your dream car. Although a minivan isn’t an SUV, chances are it’s more affordable and gets better gas mileage. A smaller sedan is even more affordable and will keep monthly payments and fuel costs low. Remember, the object is to keep monthly payments as low as possible and to keep the loan term as short as possible to cut down on interest expenses. Put as much money down on the loan as you can afford and try and avoid trading in a car that you are “upside down” in.

Consider GAP insurance and an extended warranty

While many dealer extras are a waste of money, you want to make sure that you’ll be able to pay for any unexpected repair bills. If you are taking out a loan longer than 48 months with little or no down payment, GAP insurance is also a good idea, since you will be in a negative equity situation for much of the loan period.

Get all agreements in writing

Finally, you need to realize that the dealer is acting as an agent for the lender. If it’s not in the contract or the buyers order, then it doesn’t exist. There is no cooling off period for a car loan. Once the papers are signed, the deal is final. Take the time to read over all paperwork before you sign the loan contract to make sure it matches the terms that you agreed to and always get a copy of everything that you signed.

The Bottom Line

Here at Auto Credit Express, we have helped thousands of people with credit problems reestablish their credit while driving a new or low-mileage reliable used car. On our website, www.autocreditexpress.com, we try and answer as many of your questions as possible. Our toll-free number, listed at the bottom of every page, will put you in touch with one of our knowledgeable customer service representatives, who can answer any other questions that you might have. Remember, here at Auto Credit Express, we want you “on the road” to better credit!

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