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Think You Need Perfect Credit To Get Financed? Think Again!

Many hesitate to apply for financing when searching for a used vehicle because they automatically assume they have bad or no credit or are not worthy of typical financing, but this is usually not the case.


Financing Riskier Deals
Banks are in the business of lending; if they waited only for those with perfect credit, there would be far less loans to process and much less interest for them to collect. So, banks have programs where they will lend money on riskier deals to stay in business and keep lending. You do not need to have a perfect credit score for most banks.

Getting Into The Newer Car You Deserve

Nowadays, unless you have really horrendous credit, or several bank repos, you’ve still got a great chance to get financed. In most cases, the keyword is “deposit” or “down payment.” How much can you put down on the vehicle so the bank will finance the rest?

There has been a lot of hardship over the last few years, such as the COVID disaster, which has created a situation where many people who ordinarily had good credit, now have tarnished ratings from unemployment and/or other issues. Banks understand this, so they do not always look for stellar or perfect credit when deciding on whether or not to loan money on a vehicle.

Banks are in the business of lending; if they waited only for those with perfect credit, there would be far less loans to process and much less interest for them to collect. So, banks have programs where they will lend money on riskier deals to keep lending. You do not need to have a perfect credit score for most banks. And remember, not only do banks make more money on riskier deals, the vehicle is also collateral on the loan, so they know who, when, and when not, to loan money, and on what vehicle; they have got this down to a science.

While there have always been “bad” or “no credit” options, these loans have become more common.

But Then Won't I Pay Through The Nose If My Credit Is Bad?

Not necessarily. You’ll certainly pay more than someone with perfect credit, but banks will still compete for your business, and depending on your employment and down payment, you will usually have an opportunity to try multiple banks and go with the one that offers you the best rate. Our participating dealers will walk you through this process.

In the event you only qualify for a high rate loan, you can always accept the loan, and get out of it by refinancing the vehicle in what is usually recommended to be about twelve (12) months of consecutive, timely payments, or trade-it in and buy a newer vehicle at a better rate.

In other words, if you are forced to accept a higher rate, you can likely get out of that rate roughly twelve months down the road if you make all your payments on time. Making all of your payments on time will improve your credit score and reduce risk on your next loan, whether it is for the same vehicle or a different one.

Also remember, when a bank is reviewing your credit, they will also be looking at your employment history and down payment to measure their “risk” in the deal. If you have a good solid work history, and you can provide a significant down payment on the vehicle, even with poor credit, the “risk” on the deal is reduced.

Most Of Our Participating Dealers Should Be Able To Get You Financed Through Standard Financing Options With Whatever Banks They Use, And Most Dealers Use Many Banks.

Additionally, there are some dealers who offer BUY HERE PAY HERE options which means those stores provide their own financing plans which typically require you to make a larger than normal down payment (sometimes half the price of the vehicle for sale), and weekly payments until the vehicle is paid in full. Others may have rent-to-own programs.

Can I Go To A Bank For An Auto Loan Or Do I Need To Use An Auto Dealer?

Yes, you can go to a bank for an auto loan. In fact, it is often a good idea to get pre-approved for an auto loan from a bank before you go to a dealership. This will give you an idea of how much you can afford to borrow and what your monthly payments will be. It will also give you more negotiating power at the dealership.

Here are some of the benefits of getting an auto loan from a bank:

Here are some large banks to try:

Local credit unions are also a great choice for securing funds for an auto loan and are typically less interest than ordinary banks.

If you need help, feel free to contact any of our participating dealers and ask what financing plans they offer, how much your expected down payment will likely be, and/or request a credit application which is sometimes required to find out. Our participating dealers are looking to make a deal and sell used cars, so if there is a way they can get you financed, you can be sure they will let you know. However, don't lose out on the newer car you want and/or deserve, just becuase you didn't ask about financing.

Check out the best selection of used cars under $15,000 anywhere nearby.

Dealer? Create your account today: Add your vehicles .


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