Second Chance Auto Loans

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Second chance auto loans can help you get back on the road and get your credit back in shape. However your credit score got the way it is, second chance financing can provide the break you need to get things turned around. Also known as bad credit car loans, second chance auto loans can give you an opportunity to build better credit through on-time loan payments!

If you have bad credit, low credit, no credit, or have been turned down in the past due to a credit issue like bankruptcy or repossession, Auto Credit Express wants to help.

Still not sure if a second chance auto loan is right for you? Continue reading to learn more about the types of second chance auto loans and where you can go to get started.

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What is Second Chance Financing?

Second chance financing is another word for bad credit financing. Second chance auto loans are designed for car buyers struggling with credit issues and are only offered through certain dealerships that work with subprime lenders or finance loans in house. Here's a breakdown of the two types of second chance auto loans:

  • Dealerships with subprime lenders: Car dealerships that are signed up with subprime lenders offer second chance auto loans. Subprime lenders understand and are willing to work past many credit issues, and have loan programs designed to help buyers get a second chance. These lenders understand that not everyone has perfect credit, and they're willing to look beyond credit scores to approve loans. To do this, they set specific requirements for approval concerning minimum income, employment, and residency, to name a few. Not all dealerships work with subprime lenders, but Auto Credit Express can help you get connected to a dealer in your area that does.
  • In-house financing dealerships: In-house financing car lots, sometimes called buy here pay here or tote the note dealerships, also offer a type of second chance car loan. This is a loan that you take out directly with the dealer you're buying the vehicle from. It's easy to get approved for one of these loans as long as you make a qualifying income. In fact, many of these dealers don't even check your credit. However, unlike subprime lenders, a second chance auto loan from an in-house financing dealership may not help you improve your credit, as many don't report loans or payments to the credit bureaus. This means all of your on-time loan payments won't help you improve your credit score, so you could be in the same situation the next time you need a vehicle.

What makes second chance financing through a subprime lender great for car buyers who are struggling with credit is that it enables them to finance a vehicle and build their credit at the same time. Once approved, as long as you keep up with your payments by paying on time and in full each month, you should see your credit score increase over time. Once your credit improves, you'll be in a much better position the next time you need to finance a vehicle. Or, if you're still in your existing loan, you may be in a position to refinance to get a better rate or trade in your car and upgrade.

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Second Chance Auto Dealerships

Not all dealerships offer second chance financing. The ones that do don't always advertise this service, so it can be difficult to find a dealer that offers second chance financing. Subprime lenders are indirect lenders, so you can't approach them directly to apply for a loan. Your best bet is to find a local special finance dealership that works closely with subprime lenders and sitting down with their finance department to discuss your options, which is something Auto Credit Express wants to help make easier.

When you visit a second chance auto financing dealership, you should come prepared with the documentation they need to see. Special finance dealerships and their lending partners require additional paperwork to prove your ability, stability, and willingness to repay a loan. The funding of the loan often hinges on this documentation. Typically, you'll need to provide:

  • Your most recent computer-generated check stub from your current employer, showing year-to-date income, to serve as proof of income. For many second chance lenders, you have to make a minimum of $1,500 to $2,000 a month before taxes from a single source. Income from multiple jobs can't be combined to help you qualify, although some jobs can be added to your primary income to satisfy the lender's recommended debt to income and payment to income ratios.
  • A current utility bill in your name, at the address listed on your application, for your proof of residence.
  • Proof of a working landline or contract cellular phone in your name so you can be contacted. A common saying among subprime lenders is “no phone, no loan.
  • A valid driver's license for proof of identity.
  • A list of personal references (typically five to eight) with names, addresses, and phone numbers, that don't live at your current address.

The specifics vary, so it's best to ask about what exactly you'll need before visiting the dealership.

BBB Rating
as of 05/28/2024

Second Chance Financing Car Dealerships Near You

Second chance auto dealerships can work with car buyers who have fair, bad, terrible, or no credit, as well as with borrowers who've been through a bankruptcy or repossession. When your credit is poor, most traditional lenders aren't willing to take a chance on you. These lenders typically set a strict minimum credit score threshold you have to meet, and they may automatically turn down your application if yours isn't high enough.

Second chance financing car dealerships, on the other hand, want to help you break the cycle of bad credit with a second chance loan. You can get an opportunity to get a loan you otherwise wouldn't be able to qualify for, and you can turn your credit situation around by making all of the payments on time.

Auto Credit Express can help you get connected to a second chance financing car dealership near you. We want to help people improve their lives by making opportunities for auto loan approvals more realistic, even if your credit track record isn't spotless.

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