Consumers with credit problems have a great opportunity to increase their chances of car loan approvals this time of year
Poor credit approved car loans
With income tax season just around the corner there are a couple of reasons car shoppers with less than perfect credit have an advantage this time of year.
At Auto Credit Express we know that timing is everything, especially for these buyers, since for the past two decades we’ve been helping consumers with credit issues find new car dealers that can offer them their best opportunities for auto financing.
High risk auto lenders
Although the number of loans to car buyers with less than perfect credit has improved along with the economy, lenders that offer high risk car loans typically require two very important things:
• Proof of income: unlike traditional banks, subprime auto lenders require that borrowers prove their income with a W-2 wage statement. If the borrower is self-employed or an independent contractor, most of these lenders require between one and three years of professionally prepared tax returns that show a net income that meets their wage thresholds. In addition, non-W-2 applicants may also be required to supply supporting bank statements.
• A down payment either in cash or real trade equity: in most cases, car buyers in the current market are being asked to contribute the same percentage, or more, than pre-recession levels.
Subprime lenders have minimum income requirements because, unlike BHPH car loans, they’re more interested in buyers successfully completing loans than in repossessing vehicles so they can be re-sold as quickly as possible for additional profits.
These lenders also require down payments because this is the best way to increase the likelihood that borrowers will continue to make regular, timely loan payments. With little or no money down and especially during the early stages when a vehicle is worth less than the loan balance, it’s much easier for borrowers to just walk away from a loan. But with 10% or more of their own money invested, it’s more likely these same people will continue making loan payments.
Income tax refunds
Right now, with many credit-challenged car buyers getting ready to prepare their income taxes, there is no better time to begin planning ahead and consider repairing their credit and raising their FICO scores by reestablishing their auto credit.
In most cases, employers have already taken care of the first step by supplying what is officially called a Form W-2. The Social Security Administration requires that employers distribute these forms to employees no later than January 31st. If it isn’t received by that time the employer should be contacted.
For many filers, the second step may also be covered. Especially for taxpayers with bad credit, using all or a portion of an income tax refund as a down payment can increase the odds of a car loan approval.
How we can help
At Auto Credit Express we offer people with credit challenges an easy way to find dealers that specialize in helping customers that face a wide range of credit issues.
Using our site, consumers can avoid driving around while searching for a dealer that can help them as well as avoiding the embarrassment of getting turned down for a car loan because that particular dealer wasn’t signed up with the right kind of lenders.
Not only that, our web site also helps applicants determine if they meet the basic qualifications for most of these lenders as well as help them determine how much car they can afford. Finally, unlike other sites, our toll free number is listed on every page, in case applicants have any additional questions.
So if you’re one of these people and you’re ready to begin reestablishing your car credit, you can start the process now by filling out our online auto loans application.