In most cases, consumers who have had a vehicle repossessed will need to wait at least a year until they can expect to get approved for a car loan with a subprime lender. While there are exceptions to this rule and buyers should still give it a try, the number of lenders willing to do this is so small that most borrowers should be prepared for a high interest rate and with the large down payment BHPH dealers will require, if they need a vehicle right away.
If we are reading the Manheim report correctly, despite the fact that the used car market is stronger, those vehicles most appropriate to borrowers with poor credit are, at least at this point in the year, more affordable than they were last year. So if you find yourself in this position, now might be a good time to make your move.
According to Consumer Reports, credit-challenged buyers would be doing themselves a favor by avoiding these six vehicles. Despite their affordable prices, their faults include noisy cabins, slow acceleration, poor ride quality and unacceptable scores on the IIHS small-overlap crash tests.
Consumers with credit issues who choose one of these affordable cars with the shortest loan term possible will find that once they’ve reestablished their credit, they’ll quickly be in a better position for their next loan.
Credit-challenged car buyers, especially those on a tight budget, should seriously consider automobile gap insurance when their annual mileage is above average, the finance term is over 60 months and the total down payment is less than 20 percent.
Since a borrower’s income and bills as well as the lender and lending tier all have to be taken into consideration, there is no way we can know, ahead of time, what a borrower’s approval amount might be.
The process began with a group of 23 vehicles including three minivans, four compact SUVs, four mid-size SUVs, two full-size SUVs, two full-size sedans, three mid-size sedans and two full-size pickup trucks. There also were three compact cars which Nerad describes as “often the first choice for anyone on a budget.”