Tips For Bad Credit Auto Loans From A Finance Manager

I have a unique perspective on getting an auto loan with bad credit. I have been a finance manager for almost 15 years at one dealership or another. I have seen many changes lately in how difficult it is to get a loan for a car with bad credit. The good news is it’s still possible but the parameters have changed and I’m going to let you know what it takes for you to buy a car now if you are what I like to call credit challenged.

1. The first mistake I see people making are applying at too many places at once. Some car dealerships don’t handle credit challenged customers at all or are not set up as well as others to handle your unique credit situation. Find your local dealership that advertises the most for it, and they will be the ones with the banks and resources that can help you. Applying to a car dealership that has the vehicle you like but can’t get you financed for it can hurt your prospects with the dealership that can get you financed. Sending the wrong information or to the wrong banks will hurt your credit further and waste a lot of your time.

2. The second mistake I see are unrealistic expectations. You must be flexible in what vehicle you will take and practical about the payments. I can’t tell you how many times I have worked for hours (yes it can take hours and even a day or two) to get a loan approved just to have the customers expectations be a lot higher than their credit score warrants. My best advice on this would be to figure out your basic requirements i.e. 4door vs 2door, automatic, etc. and work around those. Don’t pick specific models of vehicles or colors. Do you know how frustrating it is for me to work on a loan and have a nice newer model low mileage vehicle but the customer doesn’t like white? Don’t go for the higher priced vehicles. Remember you are going to have to pay a higher interest rate and depending on the vehicle,your finance charges on those new top of the line vehicles may be 15,000 dollars so stick with what you can really afford this time and once you build your credit go for the fully loaded sport utility.

3. The third biggest mistake is in not knowing your credit. I see small things all the time that if they were fixed could make all the difference in the world. A much lower interest rate, a much nicer car, or even the difference in being approved instead of turned down for the loan. You need to learn to read your credit and know before applying for credit what should be fixed.

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