The latest report from the NCUA shows that credit unions continue to increase their share of vehicle lending. The issue
that buyers with damaged credit face is that credit unions, as a rule, don’t buy as deeply as subprime lenders. But having said that, it never hurts to give your local credit union a first shot for a car loan.
Most problem credit lenders require a down payment of either ten percent or $1,000, whichever is less. Everything else being equal, the higher the down payment amount, the better the chances for a loan approval.
In addition, if a trade-in is involved, the equity in the trade can be used towards a down payment. If there is no equity of if the trade is worth less than its payoff, the entire down payment plus cash that equals the negative equity will be needed in order to meet the requirements of the loan approval.
If you have problem credit, chances are you’ll end up applying for a car loan at a dealership that works with a broad range of lenders.
How you find that dealer is up to you, but here at Auto Credit Express we want you to know that for over twenty years we’ve been helping customers just like you locate car dealers that can offer the best opportunity for auto loan approvals.
Although the subprime market continued to grow during the first quarter of this year, the increase in repossession rates is sure to cause these finance companies to moderate the pace of lending. If this happens, borrowers with larger down payments (with cash down or real trade equity) who are willing to consider a range of affordable vehicles will have a much better chance of receiving an auto loan approval.
With companies like ZipCar, GetAround and Hertz on Demand, it’s becoming much easier to get away with just renting a car. So should you rent or should you buy?
Although it doesn’t always result in an auto loan approval, consumers that have experienced problem credit and belong to a credit union at least owe it to themselves to try this option first.
Consumers that need a car but have concerns about their credit need to be familiar with some of the basic conditions that typically need to be met from most high risk auto lenders.