Buying a Car From a New Car Dealer If You Have Bad Credit
It may seem like an intimidating prospect, but if you have a little knowledge about your situation, buying your next car is not as daunting a task as it may seem.
When searching for a dealer for your next vehicle purchase it is important to realize that not all dealers are created equal. Sure every Chevy dealer sells the same cars, however, different dealers have different finance sources and this makes all the difference to the credit challenged customer.
I advise choosing a dealer who often advertises its ability to help customers with credit issues. This dealer likely has a large number of finance sources for these customers.
When you go to the dealership don’t hide the fact that you have credit issues. You will be asked to fill out a credit application so the finance department can submit your information to its finance companies to see who will offer you the most favorable terms. Don’t be afraid to ask which finance companies your dealer is submitting your information to. Write these down, you may want them later.
It may be anywhere from a few minutes to a few hours or more before the finance manager knows if he will be able to get you approved for financing. If they send you home, use the time to research some of the finance companies that you have applied with. You may find negative reports about a finance company and decide that you would not want your car financed with them.
When a finance company is considering your application they look at several items including your credit score, time on the job, income, time at residence, debt to income ratio, and cash downpayment. All finance companies have different formulas on determining credit risk.
Once the dealer receives a credit approval you will be invited in to view cars that will fit within the lenders guidelines. If the dealer only shows you three or four cars and you are not satisfied with your options, don’t be afraid to ask for more vehicles to choose from. Usually the dealers will have a few other vehicles that may also work.
If you decide to purchase a car, the finance manager will present you with loan closing documents. Pay attention and read these documents carefully. Ask questions as they arise. Don’t hesitate to stop the finance manager and ask him to repeat or explain something. Pay particular attention to the Truth in Lending disclosures on your retail contract. Here you will see the interest rate and the total amount of interest charges expressed as a dollar amount.
If you decide not to do business with the dealer, don’t leave the dealership without finding out which finance companies approved your application. Armed with this knowledge you can go to other dealers who deal with the same finance company and already know that you are approved.
With these simple guidelines purchasing a car form a New Car Dealer with bad credit can be less intimidating. If you need more information or have questions check out your local dealer, or consult an auto finance expert.