The Straight Goods on Car Loans…
Your experience so far…
So you’ve been to the dealership to buy your car and the experience has been less than memorable. Or, the experience has been too memorable. Because of some unfortunate circumstances, you have discovered that you don’t qualify for the financing you require to buy the car you want. And here was the end result; the dealer either informed you that you aren’t approved and asked you to get a cosigner or a tone of money down, or they tried to jam you into a different car that you didn’t want with a ridiculous interest rate. Am I close? In either case, the experience was less than enjoyable and it has left you in the position of trying to find other arrangements.
What do you do now?
Your needs for a vehicle have not likely changed, so now you are going to have to make some tough decisions. Your credit problems aren’t going away so now is the time to deal with them. You may have the opportunity to repair your credit and get the car you need, but you have to realize that it’s a give and take proposition. In order to find the financing you’re looking for, you may have to accept a higher interest rate based on the risk associated with your poor credit history. In some cases this may mean rates as low as 8-9% or as high as 22-29% depending on the difficulties you have had on the past. You can find out where you stand by getting pre-approved before you select a vehicle. Once a lender has come back with your approval, you’ll now be in a position to select a vehicle based on the approval parameters and your affordability.
This is likely where the train went off the tracks when you began the process. Close to 30% of today’s auto sales are on the non-prime segment which means you’re not alone. The problem is that very few dealers are prepared to deal with non-prime financing as they may not be dealing with the right lenders or stocking the right inventory. As a result their interest in you as a customer starts to dwindle as the effort required to get you driving your car starts to become a little greater.
By selecting a dealer that specializes in non-prime or bad credit financing, you will be dealing with someone who has relationships with lenders that approve people in exactly the same situation as you. And, they carry inventory that fits the lenders requirements including booking values and affordability.
What’s in it for the Dealer?
As I mentioned above, close to 30% of vehicle sales are in the non-prime segment. It is important as a dealer to be skilled in specialized financing or you are limiting your sales to 70% of the market. More importantly, you the customer represent a potential long-term client for the dealer. If you have chosen a reputable dealer, his interest is in not only getting you approved and driving reliable transportation but rebuilding your damaged credit. If you achieve these two goals together, you will have opportunities going forward to use your repaired credit to purchase the car that you really want at more attractive interest rates. If the dealer has earned your loyalty, he will be the one to benefit from multiple future sales.
How it works…
It’s not necessarily going to pretty to start with, but it does require some pain to enjoy the long term gain. The first bad credit car loan that you get will likely be at a high rate and the vehicle may not be exactly what you are looking for. The good news is that there are lenders in the non-prime segment that specialize in the credit rebuilding process and will re-approve you after 10-12 consecutive clean months of payment history. With your new approval, you will qualify for much lower rates and you will be closer to driving the car that you really want. But more importantly you will be rebuilding your damaged credit which will allow you much more financial freedom going forward. Let Durham Car Loans be your partner in rebuilding your credit. You will definitely enjoy the benefits of having them work on your behalf.