You can't finance just any car if you have credit problems because most subprime lenders have vehicle restrictions on the kinds of cars you can finance.
Vehicle Restriction Questions
Because we have spent the past two decades working with credit-challenged car buyers here at Auto Credit Express, we currently receive at least two hundred questions each month, most of them dealing with auto finance. Here is just one:
"I have already been shopping for a vehicle and was wondering if there are any restrictions on the vehicle, as far as a loan is concerned?"
There are a few things here that need to be discussed, so let's begin.
We Are Not a Lender
Like many questions we receive, it looks like this borrower thinks Auto Credit Express is a bank. We aren't. What we do is match consumers to dealers in their area that work with a wide range of lenders. Even if this person has less than perfect credit, the finance department should have the experience to understand their situation.
Does This Consumer Have Bad Credit?
The question doesn't mention anything about credit issues, but in this case, we're going to assume that this person is dealing with problem credit.
The Bad Credit Car Loan Process is Different
To begin with, if you have credit issues, you shouldn't start the car buying process by picking out a car.
That's because the financing procedure is different if you have bad credit. The first thing you'll have to do is find a dealer that works with credit-challenged car buyers. That's because most subprime lenders are indirect lenders – they only work with car dealers and don't directly loan money to borrowers.
Once you find a dealer (something we can help you with), when you pay them a visit, you'll need to bring a number of things with you including your most recent pay stub, a valid driver's license or state ID, and a cable or utility bill with your name and address on it.
With this information, the special finance manager will then determine if you meet the lender's basic requirements. In other words, do you have enough income, after your monthly bills are paid, to be able to afford a car loan plus the full-coverage car insurance you'll need?
Once you've cleared that hurdle, your information will be sent to a lender (possibly more than one) for an approval. If you are approved, the approval will also contain the lending tier you qualify for. That tier will determine your interest rate which, in turn, will also determine the vehicle price range you qualify for.
Subprime Vehicle Restrictions
Subprime lenders typically won't finance a vehicle that is older than 10 years with more than 100,000 miles. But that's just the start. In most cases the higher the mileage, the shorter the loan term. If a vehicle has 50,000 miles the lender might be willing to finance it for 60 months. But if a similar vehicle has 80,000 miles, the loan term might be restricted to 48 months or less.
The same goes for model year. Everything else being equal, newer vehicles generally qualify for longer loan terms than older vehicles. For example, a two-year-old vehicle might qualify for a 72-month loan term, while a four-year-old vehicle might only qualify for a 48- or 60-month loan term. Older vehicles will be restricted to even shorter loan terms, and so on.
The Bottom Line
The bottom line is this: because of vehicle restrictions, if you have credit problems, you should first get approved for a loan before you begin the process of picking out a vehicle.
If credit problems are standing in the way, but you're ready to take the first step, we want you to know that Auto Credit Express is here to help. We have a nationwide network of car dealerships that are trained in special finance. This means they have the lenders and know-how to help people in all types of credit situations.
Our service is free, fast, and there's no obligation to buy anything. See what we can do for you by filling out our car loan request form today.