Once you’ve been turned down for subprime auto financing, you may not know where to go from there, or what you can do so you won’t be turned down next time. Here are some pointers on what to do next.

Why Were You Turned Down?

Subprime auto loans are designed to help people who are struggling with credit issues such as bad credit, no credit, or bankruptcy. But lenders still aren’t able to approve everyone. This can be disappointing, but it can also be an opportunity to learn where your credit can be improved. Once you know what to work on, you can focus on building up your credit and meeting most subprime lender requirements.

Keep in mind that subprime lenders look beyond credit scores to focus on other qualifications for approving loans. What they really want to see is if the potential borrower has the ability to repay a loan, if they’re in a stable enough position to do this, and if they’re really willing to see an auto loan through to successful completion.

Though specifics may vary by lender, typically, they require a minimum gross monthly income of $1,500 to $2,000 from a single source, at least six months on your current job and three years of steady employment, proof of residency, proof of a working telephone in your name (pre-paid doesn’t count), six to eight personal references, and a valid driver’s license.

You’ll also want to save for a down payment, because it’s usually needed for a subprime loan. Lenders usually require at least $1,000 or 10 percent of the vehicle’s selling price, whichever is less. Additionally, you may want to consider talking to someone about becoming a cosigner, should one be necessary.

Still Need a Car?

car for saleOften, people turn to buy here pay here (BHPH) dealerships once they’ve been turned down for a loan. It can be easier to get a loan from a BHPH dealer, because they typically don’t check your credit, but remember: if they don’t check your credit, they probably aren’t reporting your payments either, which means your credit won’t improve as a result of paying back the loan.

You may be able to get a vehicle from one of these lots, but there are some downsides. Payments need to be made bi-weekly or weekly, usually in person, and vehicle selection is limited. Vehicles are typically older models with high mileage, as well. Be prepared to pay a higher cost over time for the car, too, as interest rates are extremely high. Lastly, keep in mind that payments must be on time – even payments that are one day late could result in repossession.

A better option for a car might be to purchase an inexpensive vehicle for cash from a private seller. Be sure to have it thoroughly checked by a certified mechanic before purchase, to ensure safety and reliability. Once you’ve purchased a vehicle to tide you over, you can begin to prepare for a future loan.

When You’re Ready, Go to a Dealer That Can Help

If you’re ready to try for an auto loan, make sure you’re going to dealers that have the right kind of lenders for your situation. Not all dealers work with lenders who help people struggling with credit issues.

Here at Auto Credit Express, we work with a nationwide network of special finance dealers that do have the right resources, and we want to help you get connected with one. Our service is free of cost and obligation, so get started today. Simply fill out our online auto loan request form to take the first step.