Sometimes, people who are struggling through credit issues rely on family members to help them get back on their feet. While their support can be helpful, it does have its limitations.
Working with the Right Lenders
People whose credit has fallen to the lowest levels still have some choices when it comes to getting a reliable vehicle. Even though financing will be more difficult, there are certain lenders that specialize in this type of auto loan – they’re called subprime lenders. These lenders typically work indirectly through special finance dealerships, meaning you can’t find one and get pre-approved before visiting a dealer.
These lenders look past lower credit scores and require borrowers to meet certain guidelines. These requirements are designed to help ensure successful auto loan completion. Once the qualifications are met, an auto loan can be a great way to improve your credit. Each on-time payment helps – as long as you’re paying your other bills.
The Limits of Financing
If you’re unable to get approved by a subprime lender, it may be tempting to have a willing and able family member or friend purchase the vehicle for you. However, when financing a vehicle, the law requires the borrower to be listed as the primary driver. But knowingly signing a document agreeing to this and then handing the car over to someone else is called a straw purchase. This is considered an illegal and fraudulent practice in most states.
In fact, a dealership can lose its license for knowingly participating in such a practice. If the person driving the car fails to keep up with their end of a bargain, the person who signed the contract is responsible for the payments and any consequences, such as destroyed credit or a repossession. Also, as the person with damaged credit, having someone else buy a car for you won’t do anything to improve your situation.
Options That Don’t Involve a Credit Check
To avoid breaking the law, there are easier ways to get a reliable vehicle when you’re a bad credit car buyer. The first option is to purchase an affordable vehicle with cash. This can usually be done through a used car dealer or a private seller. Keep in mind that the price on the sticker isn’t the out-the-door cost of a vehicle, and make sure you allow for things like sales tax, license and registration fees, and car insurance costs.
Finally, you could also try a Buy Here Pay Here dealer. These dealers are known as in-house financiers, and they typically don’t check a buyer’s credit to qualify them to purchase a vehicle. Downsides to this method are that cars are usually older models with higher mileage, and payments are often due in person at the dealership – in cash, and on a weekly basis.
Getting on Your Feet with the Right Lender
If the time is right, and you’re ready to begin taking steps toward improving your credit with a car loan, Auto Credit Express wants to help you. We work with an extensive network of special finance dealers that have the lending resources to help people with challenging credit situations. Taking the first step is simple with our online auto loan request form. So what are you waiting for? Get the process started today!