Subprime Auto Loan Financing

Subprime Auto Loan Financing

If you're in the market for an automobile, you may not be aware about what special financing is, and what it can mean for you. If you feel your credit history is not very strong, or you've had situational problems that have lowered your credit score, or you simply know your credit is bad, you most likely would qualify for special financing through a dealership that specializes in subprime financing.

Special financing, or subprime, is the fastest growing market in today’s automobile marketplace. Simply put, special financing is the segment of the market that does not qualify for conventional loans. Most people who qualify for special financing have less than perfect credit or no credit, and require an extra step in the approval process. There are a lot of myths regarding special financing but the truth is you can be helped if you are connected with the right dealership.

Some of these myths associated with subprime need to be addressed. For example, some customers feel it takes a long time to actually get approved, and on your way. This is not true. The fact is the average time from submitting your application at Auto Credit Express, to the sale can be much quicker on a sub prime deal than on a conventional sale. This is because dealerships swiftly provide a decent selection of used vehicles that will most likely accomodate your needs and desires. Most customers find they can get approved for the vehicle they want with the dealership provided to them.

Another common myth is all special finance customers will have a higher interest rate and payment. This is also not true. Consumers that are able to get approved often get better rates and terms through a sub prime lender. Payment options tend to be more flexible, but do vary upon each customer. On the other hand if the customer has really bad credit, the only option upon approval is a higher interest rate.

Another myth that sub prime customers ask is, 'Will I only qualify for an old, high mile vehicle? This is not true. The fact is Sub prime lenders that cater to consumers with bad credit prefer to sell new or late model, low mileage used cars. You will have options when you report to your dealership. Although some customers prefer a vehicle with high miles, do not assume that is the only type of vehicle you can obtain. Not only will you be able to purchase a nicer vehicle, but your credit score will increase by making your timely payments.

Will the customer need a lot of money for a down payment? Again, this is not true. On average, a cash down payment is less than One thousand dollars. In some cases, a trade in will suffice or apply towards a down payment, but every customer is different. Upon scheduling an appointment with the special finance manager, remember to have tangible documentation of your current employment. Why would a sales person want to help a customer with bad credit?

Well, it is more than fair to say it is a win win situation for both parties. A Special finance manager will sell more vehicles, both special and conventional. By selling more cars, the dealership will gain a loyal and very appreciative customer. The customer will appreciate their quality purchase, and over time their credit score will increase exponentially.

So finally, the question is asked, How does the sub prime selling process ultimately differ from your conventional sales process?

With a traditional car deal there is a meeting of minds between the car buyer and the car dealer. They agree upon a price, and the bank finances the consumer and rarely does the price of the car have to be negotiated with the bank separately.

On the other hand, with a sub prime deal, there must be a meeting of minds between three parties: the car buyer, the lender, and the car dealer. To stream line the sub prime process, the dealer generally knows what the lender will approve prior to negotiating with the consumer. This is why you will initially qualify for a select amount of vehicles with a dealership in our network. The dealer must have an idea of what your expectations are prior to negotiating with the lender. Just like a traditional sale, the sub prime buyer must agree to the sales price, the trade in value, the cash down payment, the interest rate, and the monthly payment. The lender must agree to the loan to value, the sales price, the total down payment, the interest rate, and the monthly payment.

When you put it in perspective, getting approved for special financing can be very easy and affordable. We make this process simple for you at Auto Credit Express.com. When you apply for an auto loan, we find the correct dealership in your area that can accomodate your needs and credit situation.