When you have bad credit, getting approved to finance a car in Los Angeles isn't always as easy as going down to a local dealership, pointing to a particular vehicle, and signing the paperwork. When it comes to bad credit auto loans, car choice comes after the loan approval, and in order to qualify, there are requirements both you and the vehicle you choose have to meet.
Bad Credit Car Loan Vehicle Requirements in Los Angeles
When you apply to finance a car with bad credit in Los Angeles, the dealer gets an approval from the lender, letting them know what your maximum monthly payment can be. The finance manager then presents you with vehicle choices based on this information, and what they have in stock. You can then test drive the cars and select the one you want.
No matter which vehicle you chose to finance in LA, be it new, used, or certified pre-owned, lenders have certain criteria that all cars and loans must meet. When getting a bad credit auto loan, subprime lenders typically set the minimum amount to finance at $5,000. This doesn't mean the vehicle you choose has to cost that much, but the amount financed must be at least $5,000 after taxes, fees, and dealership add-ons.
As for car requirements, lenders typically only finance vehicles that are less than 10 years old with less than 100,000 miles on them. You might think an older car would be cheaper to finance, but this isn’t the case.
Often, lenders prefer you to finance a newer vehicle with lower mileage. This is because, in some cases, people who struggle with credit issues also have trouble paying for major repairs that may come up on an older, high-mileage car.
Personal Requirements for Auto Financing
Now that you know the type of vehicle you should be able to finance, what about the requirements that lenders in and around Tinseltown have for you? Requirements vary by lender, but you can count on having to meet a few basics.
Let’s take a look at the five requirements you generally have to meet:
- Proof of identity – Bring in your valid driver’s license.
- Proof of income – Bring in your most recent computer-generated check stub showing a minimum monthly income of $1,500 to $2,000 before taxes from a single source.
- Proof of residency – Bring in a recent utility bill in your name showing the address listed on your application.
- Proof of a working phone – Bring in a recent phone bill in your name for a landline or contract cell phone showing the address on the application.
- A down payment – When you’re dealing with bad credit, a down payment is usually required. The amount needed varies by lender, but is generally $1,000 or 10% of a car’s selling price, whichever is less.
Personal references are also usually needed when you get a bad credit auto loan. Generally, you need to provide a list of five to eight personal references. Make sure to include names, addresses, and home and work phone numbers, and let people know you’re going to use them. Lenders typically use references as an additional form of identity and general information verification. They may call or email all of your references, or none at all.
Finding the Right Bad Credit Car Dealership
Now that you know the car choice and general requirements to get a bad credit car loan in Los Angeles, it’s important to remember that not all lenders or dealers can help people that have less than perfect credit.
We’re talking about one that can look past your poor credit and focus on other factors, such as whether or not you can afford a loan, and if you have the financial, employment, and residence stability to successfully complete a loan.
These lenders are called subprime lenders, and they work exclusively through special finance dealerships. Not sure which dealers around LA are special finance? We’ve got your back!
At Auto Credit Express, we specialize in helping people get connected to local dealerships that can help them get the lending they need. To get the process started right now, fill out our easy, fast, and free auto loan request form today!