Jeff’s situation isn’t as great as Joe’s. Unfortunately, he has bad credit. He only has $500 for a down payment, no extra cash to cover necessary fees, and no trade in. And he needs a car now. He knows he has a slim chance of getting approved, and doesn’t have time to go through the process multiple times only to be turned down. How exactly did Jeff get what he needed?
When your credit is damaged, your options for auto financing of any kind are dramatically reduced. So, of course, walking into any old dealership and saying “finance me” is out of the question, and honestly, a waste of time. So, where do you go?
The moderation in subprime auto loans means that high-risk lenders can afford to be more selective. It also means that potential borrowers with less than perfect credit should check their credit reports, know their credit scores and plan on a larger down payment to maximize their chances of success.
Vehicle repossession is never a good thing and a black mark like this can linger on a credit report for seven years or longer. Multiple repossessions are even worse and, for the most part, consumers must wait until just one appears in their credit file.
The new tool introduced on the NHTSA web site should help both car buyers and owners, including those with less than perfect credit, by ensuring the vehicles they drive or plan on purchasing are as safe as possible and subject to no open recalls.
With the increase in subprime car loan delinquencies and repossessions, subprime lenders will certainly be taking a closer look at applications and, in the long run, may be pulling back on the number of loans they approve. By following our tips, applicants will give themselves a better chance for an approval.