The experience of buying a car can be costly and daunting. You have to look for the best car that suits your need while trying to get the right finance. Today, you can get a car without the need to pay in cash through auto financing. This helps people who cannot pay upfront the expense of a car.
Remember that everything we purchase depends on our needs. Before buying a car, it is important to think of why you need it. If you are a student, for example, you can buy a used car since you will just need it for commuting to school. This is a way of being practical. If in case, you can afford a new one, go ahead and get your brand new car. This is also a practical move because it is a good investment in the beginning. Its maintenance cost is usually lesser than that of the old ones.
You can choose from many financial institutions that offer auto loan. If, for example, you have a bad credit score, you can always look for subprime lenders. They give the chance for people with bad credit and bankruptcy history. Another option is dealerships. In getting the service of dealers, you can discuss both the car and the car loans. However, they lend money on receiving commissions from the financial institution. This amount adds up to your loan. Financing in this type of loan provider is easy but not advisable especially if you are not financially stable. Another option is the banks. Before getting the loan, you have to meet the bank’s criteria and requirements. This process usually takes some time and may delay your auto purchase.
Above all these options, it is always best to do your search for auto loan online. Lenders from web-based auto financing companies offer affordable loans. They even offer discounts especially on student car loans. Applicants with poor credit score are usually surprised with low interest rates. It also features a short process for the loan application. All you have to do is fill out a simple application form. As soon as you submit the form, they will start processing. The company’s network of lenders will bid for this. The more lenders compete on the bidding process, the lower the bid gets. You will have to wait for a couple of days or less.
It is important to be critical in choosing online auto loan financing companies. Some of them are fake. If you notice a website that offers highly incredible and anomalous offers, think twice for it might just be a scam.
Before deciding on the options, keep in mind the following principles in auto financing: The smaller the installment, the higher the interest goes. It is advisable that you choose larger installments because it means you will be paying lower interest. Also, the more installments you have, the more interest you need to pay.
Whether you have the budget or not, it is always wise to choose your car loan wisely to save you from future trouble.
You may have felt that trying to get approved for a car loan has been a frustrating experience. Applying to one auto financing lender and getting rejected due to a poor credit score is one thing, but getting rejected again and again is just no fun. And, it gets you not one bit closer to getting that car you need.
Sometimes, you may feel just like giving up altogether and trying something else. Maybe you should go live on the top of a mountain in the Himalayas where cars aren’t needed. Or, you could become one of those marathon runners who runs 100 miles in a day. Or, how about just to taking the bus or your bicycle everywhere you need to go? But, when these crazy and impractical fantasies leave your head, you are left with the hard reality that you basically have no choice but to find a way to qualify for auto financing. Back to square one.
Fortunately, for people with a credit score rated as “poor” (under 600) by most lenders, there is the little-discussed world of bad credit auto financing. In fact, these financing companies are in the business of extending car loans to people in just your situation.
If you are looking for auto loan financing for a credit score of 600 or lower, here are 5 tips for getting approved more quickly:
1. You need to become familiar with the world of bad credit financing:
About 90% of car financing companies are happy to make loans to people with fair, good, or excellent credit scores. However, about 5% of them will ALSO loan to bad credit individuals – and the remaining 5% specialize in ONLY loaning to people in this credit bracket. The important thing is to learn how to find this last group.
2. Understand what bad credit auto financing lenders look for – beyond your credit score:
These specialty lenders have made it their business to learn ways to evaluate the credit-worthiness of individuals with low FICO scores in ways other than using the score itself. For example, some of those ways are to:
* look at certain details within the credit report
* consider your current income, employment and/or residential status
* look at past employment and residential information
* ask for references
3. Scrub your credit report squeaky clean (as much as possible):
Before you start applying to these lenders, you will want to review your current credit report(s) and look for any errors or misunderstandings which, if removed, could result in your having a much better score in a month or less.
4. Build yourself a list of candidate bad credit auto financing lenders:
Now, it is time to improve your own odds of getting approved for the best-possible auto loan financing rate. To do this, conduct some online research and make a list of at least 4-5 bad credit auto financing lenders. They advertise their specialty, so they will be easy to find. Of course, as with any industry, not all of them are reputable, so really check out their websites before adding them to your list.
5. Become a savvy negotiator if you want to get the lowest-possible interest rate:
As you apply to each lender, make sure to reject the initial offer you get. This will be hard to do and you will resist it, but make no mistake: doing so will increase your odds of them coming back with an even better offer.
Follow these 5 tips as your line yourself up with the best auto financing for someone with a credit score of 600 or lower.
In years past, if you had bad credit, a bankruptcy, or repossession in your credit history, it was virtually impossible to apply for auto loans through automobile dealerships or even directly through the auto finance firm; the answer was almost invariably “no”. This created an uncomfortable and embarrassing experience for many people that found the car that they wanted at a dealership, only to be turned away. With the advent of the Internet, giving consumer’s ability to search for an online auto loan, automobile dealerships and auto loan finance companies now have to compete much more vigorously to get a consumer’s attention, let alone their business; today, it is a borrower’s market. As a result, second chance auto loans and other online auto loan products have become readily available to consumers looking to apply for auto loans online to purchase new or used cars, regardless of their credit history.
All Second Chance Auto Loans are Not Created Equal
Although automotive dealerships and auto finance companies are currently operating in a highly competitive “get every buyer that they can”; type of environment, not everybody applying for second chance auto loans will be in the same boat. One important thing to remember is that automotive dealerships and lender’s will consider you and your vehicle loan in regards to how much risk that they feel you represent as a borrower (i.e. what is the chance that you will make your car payments on time and completely?) This assessment of risk is based upon a formula, unique to each dealership or lender, that is calculated using facts about you that you provide, facts about you available through the credit reporting agencies, your income, and other factors. Some negative factors that might be considered when you apply for auto loans are:
• How long ago was the last negative entry on your credit report?
• Do you have accounts that are currently in arrears or in default?
• Have you had a car repossessed in the past few years?
• Are you currently in bankruptcy, or has your bankruptcy been discharged?
• How low is your credit score?
• What is the ratio of how much credit that is available to you (e.g. credit cards and open loans) as compared to your debt?
That being said, there still are factors that can mitigate an automotive dealership or lender’s risk to positively influence the outcome of your application:
• Do you have money for a down payment available? Even if a down payment is not required, making one can be a smart thing to do. The down payment can be a smaller token amount, like $250 or $500. This will let the dealership or lender know that you mean business and that you are more likely to make your payments in a timely manner, as you now both have a stake in the vehicle. Still and all, it makes great sense for you to make as large of a down payment as you can afford. Doing so will give the dealership or lender confidence in you, and it will give you the ability to negotiate a better interest rate.
• Is there someone that you know with a good credit history that would be willing to cosign on your online auto finance application? A cosigner with good credit, usually a family member or close friend, would immediately put you into a better loan with better terms and a lower interest rate.
• What is your income? Obviously, the higher your income, the better that the dealership or lender will feel about approving your auto loan.
Note, see also our recent article “How to Get Approved for an Auto Loan with Bad Credit if you have Low Income”; for more information.
• What is the ratio of your rent or mortgage payment as compared to your gross income? A scarcely known fact is that automotive lenders and dealers pay close attention to this figure. For example, if you make $1,500 per month income, and your monthly rent or mortgage payment is $500, then your housing cost takes 30% of your monthly income. Anything beyond 40% or so will send a warning to the lender or dealer and they might need to be convinced that you will be able to make your monthly car loan payments on time. Take this into consideration when you fill out your auto finance application.
As we said before, because of the extreme competition in today’s auto loan finance market, there are second chance auto loans available for almost anyone that applies for an online auto loans. The factors above can have a profound effect on your interest rate, monthly payment amount, and the duration of the loan, as well as on any additional requirements that the dealer or lender may have of you in order to approve the loan.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.