Credit challenged buyers can potentially save hundreds of dollars by following some simple advice once they have approved auto loans
People who are credit-challenged need to make smart choices when financing a vehicle with bad credit auto loans.
We understand this situation because for the last ten years Auto Credit Express has been helping applicants with poor credit find dealers that offer bad credit auto sales. Our website also helps to explain tote the note dealers and bankruptcy issues as well as today's topic, understanding the horrible credit auto loans process.
Understanding bad credit auto loans
We sometimes hear from people about how they've gotten into trouble by signing for a car loan they can't afford. But by following some simple guidelines, they might not be in the situation they find themselves now.
Even before you visit a dealer, you should know at least one of your FICO scores and what's contained in your credit reports. With a credit score above 640, you might be able to get a conventional car loan with a captive finance company, bank or credit union.
Scores below 640 usually require a bad credit car loan. Since the conventional and bad credit buying processes differ, knowing both credit score and credit report information can be all-important.
The next step is to determine a car budget. In addition to car payment, this should include the cost of gas as well as full coverage car insurance. By comparing this figure to your income after expenses (use the loan calculators on sites such as autocreditexpress.com for help) it will help you determine your debt to income (DTI) and payment to income (PTI) ratios and if these meet the requirements of typical subprime auto lenders.
Backend products are options offered by dealership finance managers. Of these, gap insurance makes sense if you have a 60-72 month loan and/or less than 20 percent down.
A reasonably-priced extended warranty is also a good idea if you're buying a used car or financing a new one beyond the new car warranty period.
You should stay away from window etching, rust-proofing and paint protection. All three add little or nothing of value and you can etch windows and seal the paint yourself for a fraction of the cost.
Finding a dealer
Check with friends, co-workers and the Better Business Bureau before visiting a dealer to determine its reputation for fairness in dealing with new and used car customers.
Bad credit applicants, in particular, might find it difficult locating a dealer that can help them – which is why they should check out web sites such as ours.
As we see it
For the best results, know your credit scores and be familiar with your credit reports. You should also check your income and expenses to make sure you meet basic lender requirements before submitting a loan application.
Finally, if you have bad credit, you probably have more options than you realize. Before visiting a tote the note dealer, check us out first.
That's because at Auto Credit Express we specialize in helping people with bad auto credit find a dealer for their best chance at approved auto loans.
So if you're serious about rebuilding your car credit, you can begin now by filling out our online auto loans application.