Sub Prime Auto Financing - How To Get Approved
Auto buyers with blemished credit may wonder how they can get
approved to buy a car. The answer is sub prime auto financing.
When seeking a sub prime auto loan the question shouldn't be
just, "How do I get approved?" The better question to ask is,
"How do I get approved for the best sub prime auto financing
available?"
Prospective car buyers who have a credit score below 620, a
history of late payments or a recent bankruptcy will all be
candidates for sub prime auto financing. However, all sub prime
loans are not created equal and the wise shopper will do a
little homework before going out to the car lots.
Pulling you own credit report is a good place to start any time
a major credit purchase is being considered. A buyer wants to
know as much about his credit record as a potential lender
knows. Check your report for inaccuracies and notify the credit
reporting agencies if you find any.
Being realistic about the car a buyer can afford also increases
the chances of obtaining a sub prime auto loan. This purchase is
the first step in repairing less than stellar credit and it may
require buying the best car for the buyer's budget not the
purchaser's dream car.
The largest possible down payment will further help the buyer to
find sub prime financing. A down payment may also lower the
interest rate of the loan. A lower interest rate generally
translates into a lower monthly payment as well.
Just as finding the right kind of car requires shopping finding
the right kind of sub prime auto financing requires shopping. An
auto dealer makes part of his profit from financing car loans.
The car loan made on the lot with the dealer may therefore cost
more than auto financing that is arranged before hand by the
buyer. Even a consumer looking for sub prime financing may be
able to be pre-approved for an auto loan. Walking onto the car
lot with a loan in hand gives a buyer more clout in the process
of negotiating the auto's price.
Where are some of the places a shopper with damaged credit can
look for an auto loan?
1. Financial Institutions That You Already Have Relationships
With - Many banks will help a current account holder to
re-establish credit, particularly if the customer has both
checking and savings account. Some credit unions are also
relaxing their credit standards to include sub prime financing.
If the applicant has direct deposit with the institutions and
will allow payments to be set up as regular debits this also
works favorably.
2. Look For Lenders Through References - Check with The Better
Business Bureau, use the yellow pages and ask friends for
references.
3. Look On The Internet- Be wary, however, of giving out credit
information to anyone who solicits loan business online. This
applies equally to anyone who solicits business through the mail
or over the phone. Always check a company out before providing
it with any sensitive information.
Once several lenders have been targeted, a buyer should sit down
with them and be honest about the situation. Many consumers
require sub prime auto financing and they should not allow
themselves to be pressured or intimidated because they are
embarrassed about their credit histories. Receive all offers in
writing and take the time to read them carefully and compare
them.
Finally, remember that receiving credit is an ongoing process.
Making timely payments on a sub prime auto loan can be the first
step in revitalizing a poor credit record.