If you’ve got more than one repo on your credit reports, you’re going to run into trouble getting financed by traditional and subprime lenders for a while – but you still have a few options if you need a car.
The Trouble With a Few Repos
When you have multiple repossessions on your credit reports, it's not going to look great to any auto lender – including subprime lenders. Subprime lenders may finance you with one repossession on your credit reports if it's over a year old, but usually not if you have multiple repos.
Luckily, time heals all credit reports. Repossessions stick around on your credit reports for up to seven years. If you have more than one and you want to work with a traditional lender or a subprime lender, you’re going to need to give yourself some time to repair your credit and wait for the repos to drop off. It can be frustrating, but multiple repossessions are a big red flag to lenders and you’re not likely to get financed for a car loan in this situation.
But, if you need a vehicle right now, there are dealerships that might be able to help you, even if you have multiple repossessions on your credit reports.
No Credit Check Dealerships
There are dealers that don’t typically take your credit reports into account when they’re considering you for an auto loan: buy here pay here (BHPH) dealerships. They’re used car lots that have in-house financing, which means that your dealer is also your lender.
BHPH dealerships are pretty common, and you’ve likely seen them before. Everything is done at one location, so there's no need to drive to your bank or check with different lenders looking for financing.
BHPH dealers don’t rely on third-party lenders, and they don’t normally review your credit reports, which can mean a second chance at getting into a vehicle when you need one right away. However, there are some disadvantages to be aware of.
A Quick Look at BHPH Dealerships: Pros and Cons
If you need a loan now, and have multiple repossessions on your credit reports, a BHPH dealer that doesn't check your credit may be the way to go. We’ve compiled a quick look at BHPH dealerships to help you mull it over:
Pros of BHPH dealerships:
- Usually no credit check
- Quick shopping experience
- Common/easy to find
Cons of BHPH dealerships:
- Much higher than average interest rates
- Large down payments
- Loans not usually reported to the credit bureaus
- Inventories of used cars only
Finding Bad Credit Dealerships
When you’re thinking about financing through a dealership with in-house financing, you should know that your credit reports or credit score aren’t likely to heal. It’s a good rule of thumb to assume that a dealer that doesn’t check your credit for financing probably won’t report your on-time payments, either. Additionally, nearly every lender reports missed or late payments, so a BHPH dealership is likely going to be quick to report a loan default and repossession, if it comes down to it.
If you need a vehicle right now, a car from a BHPH dealer could help you get around while your credit reports are healing from past multiple repossessions. Once those drop off and your credit score gets back on the up-and-up, your chances of getting financed by subprime, and possibly traditional, lenders increases.
Looking for a dealership that can work with your credit situation? Start car shopping here at Auto Credit Express, where we have a coast-to-coast network of dealers that work with bad credit borrowers. We’ll look for a dealership in your area after you fill out our free, no-obligation auto loan request form.