Keep Big Bad Credit Auto Loans from Blowing Your House Down
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While you depend on your car or truck to get you places, being late on car payments could result in having your car taken away from you. This can cause anxiety which may result in you doing business with companies who claim they can help reduce your monthly car payment to avoid repossession.
While car loan scams are now beginning to grab the attention of government enforcement, it is important for credit challenged buyers to make smart choices so that they can potentially save hundreds of dollars.
Those having car payment trouble should know that while companies making these promises may sound like a possible way to get out from under, can be smooth talking you into a scam.
Seek Those with Experience
It is very important for those who are burdened under credit challenges to know that now is a crucial time to get smart and make good choices. Financially burdened individuals are often suffering from a psychological burden that can make it difficult to think clearly enough to make wise decisions. It moments of distress, predatory loan companies can come along and make you grand assurances in order to get you to trust them.
Instead, credit-challenged people should find those with experience and dependability. Seek experienced companies that have a reputation of being effective in their field. Valley Auto Loans has been working with applicants with poor credit locate those dealers who offer sales to individuals with bad credit. Our site can help explain various types of dealers and help people gain a better understanding around issues of bankruptcy and bad credit auto loans processes.
The Same Story
Time again we hear the same story: They pay a fee for the promise of a loan modification, and nothing was done to secure the results that were originally assured. Scam artists often create a compounded problem for the clients by instructing them to stop making their car payments while the companies were supposedly negotiating with the lenders. Often these people only find out later that the companies hadn’t done anything or contacted the lenders at all.
Guidelines to Avoiding Bad Car Loans
Know Your Credit Score
Before you even go to visit a dealer you should know at least one of your FICO scores and find out what is in your credit report. A normal car loan with a captive finance company, bank or credit union can usually be secured with a credit score that is above 640. By knowing your credit score you will be better prepared to enter the deal knowing your limitations and abilities.
Determine Your Budget
Next, you should take steps to determine your car budget. Make sure to include the costs of gas along with the full coverage car insurance. You can determine your debt to income (DTI) and your payment to income (PTI) ratios. Then you can determine if they meet the requirements of typical subprime auto lenders.
Backend Product Options
Backend product options are sometimes offered by finance managers at dealerships. Among the various backend product options, gap insurance is often beneficial if you have a 60-72 month loan or have less than 20 percent down currently.
An extended warranty is also a good idea if it is reasonably priced and if you are looking to buy a used car or are planning on financing a new one beyond the new car warranty period.
It is best that you avoid window etching, rust proofing and/or paint protection, however, as all three of these contribute very little to the overall value of the car. Also, you can etch windows and seal the paint on your own for just a fraction of the cost they would charge.
Locating a Dealer
Before deciding on a dealer, it is important to make sure that you check it out with the Better Business Bureau. Also, consult friends and co-workers who may have experienced the dealer as well. By doing this you can determine the dealer’s reputation for fairness in it’s dealings with new and used car customers and clients.
It can be especially difficult for applicants with poor credit to find dealers who will be able to help them. This is why it is important that they stay informed by checking out sites like this one. We keep tabs on reputable dealers who can help and will make sure to point you to a dealer who is the right fit for you.
The Bottom Line
Overall, to ensure you get the best possible outcome, it is important for you to be informed as to what your credit score is and that you become familiar with the contents of your credit reports. Also, you should be checking your income and your expenses in order to make sure that you are able to meet the basic lender requirements before you submit a loan application for approval.
Lastly, if you are someone with poor credit, you should realize that you probably have more options that you think you do. Before hanging your head and visiting lesser dealers that you think will accept you, come check us out.
At Valley Auto Loan we specialize in assisting individuals who suffer from poor credit and we get them connected with the right dealer who can offer them the best chance for loan approval. There is no reason for you to go-it-alone. Come see us and let us help you get back on track.
Whatever happens, don’t despair. It is still extremely possible for you to get back in the game and to begin rebuilding your car credit. Before you know it, you can be back on the path to good standing.
Start off on the right track today by filling out one of our online auto loans applications or by contacting us with specific questions. Our dedicated staff will be happy to answer any questions you have and to get you back on the right path.