Recovering from credit card and debt issues can leave you feeling helpless. If you have suffered from poor credit problems in the past or you are trying to work your way out of debt right now, buying a car may seem out of reach. While financing a car may feel impossible, it can be done. If you live near the greater Philadelphia metro area there are several options for auto financing, especially if your credit is less than perfect.
Being plagued with bad credit can have a crippling effect on your financial lifestyle. It can make it impossible to get good interest rates on loans or credit cards and can greatly limit your options when it comes to qualifying for car loan. This may not much of a problem if you live near Central City and can depend on mass transit, but its a major problem if you live in Northeast Philly or do a lot of business in South Jersey. So then what can you do?
If your bank or credit union has refused to give your credit application a chance because of a low FICO or credit score, try getting a bad credit auto loan. Most lenders will run your credit score immediately, to find out if they can work with your credit history. A score under 600 is considered poor credit and the dealership may not have the resources available to seek a lender who is willing to take the risk and offer you a loan package.
However now a days there are many specialized dealers and lender who are willing to work with low FICO scores and will be able to offer you an auto loan based on the following determining factors:
Assuming you can meet the requirements above, you'll find many local options to help you get into a vehicle, but which one is the best for you? Depending on financial situation you may find one of the below options makes more sense then the others.
Maybe you had a past bankruptcy or you are going through one right now. The truth of the matter is that with a bankruptcy looming over your shoulder, it can be nearly impossible to get an auto loan approval. A dealer that offers in-house financing can help you get past your bankruptcy and help you get into a vehicle that you can afford.
In the case that you are currently involved in a bankruptcy proceeding, there are several things that could affect final loan approval if you are seeking traditional lending. Including obtaining new assets such as an automobile, spending more than a pre-specified amount on a vehicle as ordered by a judge and obtaining new credit or debt. Finding a lender in the Delaware Valley area that specializes in bankruptcy auto loans will allow you the best chance of getting back into a car during a very difficult situation.
If you are currently involved with a bankruptcy proceeding, seek advice from your attorney or legal counsel prior to purchasing a vehicle. It could ultimately affect your case and you may be required to forfeit the loan or sell the vehicle.
When on the search for a car and a lender, choosing one that specializes in buy-here-pay-here loan programs can help you get into a vehicle without a lot of hassle. Car dealers who allow you to make the payments on the vehicle at the dealership are often very flexible with their credit requirements. They will often require you to provide a down payment and show proof of your W-2 forms, tax return or recent pay stubs.
Most Philadelphia buy-here-pay-here car dealers are willing to look past negative items on your credit report and offer you a fair deal on a loan package to get you into a car and get you back on the road. However because you pay at the dealership as the name suggest, its advised to only shop dealers close to you. Getting from Upper Darby to North Phila. during rush hour to pay a car bill can be a hassle, so plan accordingly.
A rent-to-own car lot offers deals to qualified buyers that includes making timely rent payments and then eventually owning the vehicle. This is a great opportunity if you have bad credit or you are going through a bankruptcy. You will still make monthly payments to the car dealer but there is no loan agreement to report to the major credit bureaus. In most cases, the agreement is referred to as a rental agreement or rent-to-own which means you do not have any equity in the car, therefore it is not considered a true asset.
In some cases, per the agreement, you can even walk away from the vehicle by returning it in good condition. This means that if your credit situation worsens or you have to relinquish the vehicle due to a job loss or lack of income, you will not be penalized for doing so.
After attempting bad credit loans through your lender or several dealerships, you may feel discouraged thinking a used car is not obtainable. Keep in mind that each dealer has its own lending criteria, so cross shopping is advised. When you visit a dealership that offers in-house financing in Philly, you are able to qualify for a payment plan and get into a used car that same day.
Most in-house financing companies in the greater North or South Philly areas offer used vehicles to buyers with any credit rating. The trade off however is that many dealers won't report your recent good credit to the major credit bureaus which makes them often a way to get a car with bad credit, but not always a way to raise your credit rating.
Tote-the-note car dealerships are unique in that they offer their own financing or payment plans on a vehicle. When you visit, you will be asked to fill out a pre-loan request form form to see how much of a vehicle that you could qualify for. If you are in a low-income range and you have bad credit, a tote-the-note car dealer will look past your current situation and try to get you into a car that is affordable and reliable.
Vehicles range from older models that may have high mileage and some wear to late-model vehicles with lower mileage and in some cases, warranty options. Their main goal is to get you into a car that you can afford while offering you a second chance at automobile ownership.
As you can see, having financial difficulties and bad credit shouldn't hold you back from owning your own car. While times may be challenging now, the main advantage to getting a bad credit car loan in the Philadelphia area is that you can use your timely payments to build your future credit.