Buying a car with credit amnesty – also known as bad credit forgiveness – can be more difficult if you need to finance a vehicle. Luckily, there are dealerships out there that work with lenders that offer bad credit auto loans, and we can help you get connected to one near you. Before we do that, you need to make sure you qualify for a bad credit car loan and know the type of lender you should be working with.
Working with the Right Lender
When you have bad credit, you can’t just walk into any dealership and expect to get financed. Instead, you need to work with a special finance dealer that offers bad credit financing. There are two types of dealerships that typically offer credit amnesty programs:
- Special finance dealerships – These dealers work with subprime lenders that know how to handle various bad credit situations. Subprime lenders check your credit, but they also look at other factors, such as income and residency. When you finance through a subprime lender, you get the chance to improve your credit because they report loans and on-time payments to the credit bureaus.
- Buy here pay here dealerships – Sometimes called tote the note dealers, buy here pay here dealers are also lenders. This is one-stop shopping, where you can buy a vehicle and finance it in the same place. Unless they state otherwise, they don’t run credit checks, and use your income and a down payment to approve you. Although it’s relatively easy to get approved for financing through one of these dealerships, you can’t improve your credit over time unless they report your loan and timely payments to the credit bureaus, and not all of them do.
Bad Credit Auto Loan Requirements
Checking the two types of lenders you could work with, let’s take a look at the specific requirements they generally ask for.
Requirements for subprime lenders:
- Proof of income – The income requirement varies by lender, but most subprime lenders require you to make a minimum of $1,500 to $2,000 a month before taxes from a single source. Bring in a recent computer-generated paycheck stub that shows your year-to-date earnings, or recent tax returns and bank statements if you’re self-employed.
- Proof of residence – Bring in a recent utility bill in your name at the address listed on the application to prove you live where you say you do.
- Proof of a working phone – Bring in a recent phone bill in your name sent to the address on the application. It can be for a landline or contract cell phone, but prepaid phones usually aren't accepted.
- Down payment – The minimum down payment requirement varies, but most subprime lenders ask for $1,000 or 10 percent of the car’s selling price, whichever is less.
Requirements for buy here pay here dealers:
- Proof of income – Just like subprime lenders, the required minimum income amount varies, and you should bring in the same type of documents to prove your income.
- Down payment – The down payment is extremely important to buy here pay here dealerships, and it’s often higher than with subprime lenders. These dealers typically base the down payment requirement on the cost of the vehicle, so it truly depends on the car you choose.
Get Connected to a Dealership Today
Now that you have an idea on what types of dealerships offer credit amnesty and what they’re looking for, are you ready to take the next step? If so, Auto Credit Express is here to get you connected to a local dealer that can help you out.
We’ve been doing this for over 20 years, and we want to help you get started on your auto financing journey. To get the ball rolling, all you have to do is fill out our free and easy car loan request form, and we’ll get right to work finding a dealership for you in your area.