Consumer Car Buying Advice Blog

If you currently live in South Bend or another city in the St. Joseph county area and you’re thinking of purchasing a new or used car, there are a number of things that you should do before you go shopping for your next vehicle.

How to choose an Indiana dealer for a bad credit car loan

Here at Auto Credit Express we are often asked, by residents of the Hoosier state why they shouldn’t just get into in their current car and drive down to Ireland Avenue or State Route 993 to look for a car instead of applying for a loan at autocreditexpress.com. The short answer is that it really depends upon your credit history and your current credit score (FICO score).

Credit score

If you have a FICO score that is over 640 and a fairly extensive credit history, you should be able to purchase a vehicle with a traditional prime or near-prime auto loan. But even if this is the case, you should still do some research on the internet. For example, Consumer Reports has an excellent web site that allows you to view the repair histories of most cars (provided you are a subscriber), so that you can see how the vehicle you’re interested in compares with the other cars or trucks in its class. Here is another example: if you search Google Maps for “South Bend car dealers”, you’ll not only get dealer locations, you can also read any relevant dealer reviews, as well.

Not so great credit

If you have less than perfect credit, however, you may want to hold off driving around South Bend (or Mishawaka, Lakeville, Granger or even Westfield). Here’s why: the bad credit car buying process is much different than the traditional way of purchasing a vehicle. And just as the bad credit buying process is different, so is the dealer that can help you with a bad credit car loan.

You should know that many car dealers choose not to deal with subprime lenders (the type of lenders that approve loans for customers with bad credit). The subprime loans that these banks offer require more effort than regular loans in the sense that dealers are responsible for more documentation and for making sure that the loan paperwork is correct as well as verifiable. If anything goes wrong during the documentation process, the lender will send the contract back to the dealer and the dealer holds the contract for the car. This means the dealer must collect the monthly payments from the customer and most dealers do not want to have to do this.

As a bad credit car buyer, it’s important to realize that just because a dealer happens to sell cars near a major freeway, or even Western Avenue, it does not mean that dealer has the right kind of cars. This is because a dealer’s new and used car inventory has to be adjusted for subprime lending. Cars on their lots have to meet lender guidelines in terms of mileage and year. Their used cars need to be purchased at or below NADA or Kelley Blue Book wholesale, since subprime lenders base their “advance” (how much they will lend) on these figures. New cars also have to be within a certain price range, since bad credit lenders are very strict about keeping your car payment within a budget range. Without the correct inventory, the dealer can’t sell any of the cars on the lot to subprime customers.

In addition to documentation and inventory issues, there is the large number of subprime lenders as well as the complexity involved in understanding the varying programs that they offer. Most subprime lenders have at least five “tiered” programs (based on a credit score range) and each program can have its own set of requirements. Without a knowledgeable special finance department, keeping track of the lenders and programs is virtually impossible.

How Auto Credit Express can help South Bend car buyers

At Auto Credit Express, our business is the subprime car market. We have helped literally thousands of people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit at the same time. Our Indiana network of affiliate dealers specializes in bad credit car loans. If you still have questions, the information on our web site, www.autocreditexpress.com, can help you determine how much car you can afford and, unlike other sites, our toll free number is listed on every page in case you have any additional questions.

When you decide to buy a car, our credit application can be filled out in the comfort and security of your own home. Remember, to fill out an application or for more information please feel free to visit our web site at www.autocreditexpress.com. We hope to see you “on the road” to better credit in the City on the St. Joseph!

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