Having a bad credit rating will impact your buying options, and until you have met with a bad credit car dealer, those choices will be hard to determine. You may not be able to get a brand new car, or the dealer you are working with can only qualify you for certain types and models of vehicles.
If you’re searching for a car, you probably want to be as prepared as possible when you find the dealership that can approve you for an auto loan. For bad credit car buyers, one of those steps is having a list of references ready to present to your potential lender. When you are working with a dealership that specializes in alternative auto financing, they look at factors outside of your credit to determine your reliability as a borrower.
Splitting payments can reduce the interest charges of a simple interest car loan, even for credit-challenged borrowers.
If you lose your job, how are you supposed to keep up with your car payments? Is repossession inevitable? Absolutely not. There are ways to navigate this difficult situation and to keep your head above water until your finances can be straightened out.
For borrowers with bad credit, a very large down payment can often offset a number of other negatives, including income that cannot be garnished. But in addition to exceeding the down payment requirements, many subprime lenders will also look at a borrower’s stability, income and past credit habits before approving the application.
One of the most challenging things for car buyers is when a situation arises where the current car becomes either unsatisfying or unaffordable. What can you do when you need to get a new car even though you still owe money on the one you currently own?
The fastest solution is to roll the negative equity (what you still owe) into the new car loan. While some dealers will allow you to do this, there are a few factors you need to consider, such as the remaining balance on the current loan, and the quality of your credit.
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.