How to Buy a Car With Less Than Perfect Credit
Are you a person with less than perfect credit? If so, don’t let it get you down. The average American owes 26% of their income to debtors, and the number is only going up. In fact, it has become such an issue that the United States government is working toward a remedy to conquer the debt on a national level. Often, people with past credit issues can think that they are alone in their struggles to raise their credit levels. But there are ways around increasing your credit levels, and not all of these ways are dependent upon time and huge credit payments.
One of the best ways to increase your credit in a timely fashion is to make a big purchase on credit and pay it off promptly. The problem with this is that it can be tough for people who have past credit issues to apply for lines of credit to increase their credit. This extremely sticky situation is not helpful to either credit companies or customers. If customers can get a line of credit, then the interest rate is dangerously high, often inciting new credit issues once they start to pay these high balances off. Credit companies offer these high rates of interest because they want customers, but they don’t trust their customers enough to make payments on the loans they take out. High interest rates, as well as denying the opportunity for credit fixes for customers, also ultimately turn customers away. So, where do lending companies draw the line?
Are you looking for a new car, or to rebuild your credit, but can’t afford to take out a loan with a traditional credit-based company? Consider working with a buy here pay here dealership like Auto Bank. Here is how we can help you buy a car with less than perfect credit.
Buy Here Pay Here Dealerships Work With Physical Collateral
Your credit score is a non-physical form of collateral. It is a standardized way of assessing how good you are with money and therefore a way to tell a bank quickly whether or not they want to lend you money. While credit scores are excellent for banks, they are basically the only ones who benefit from credit scores. They are not comprehensive, and therefore, do not tell much about the overall customer situation.
With buy here pay here car companies, you can obtain a line of credit despite your credit history. Companies like Auto Bank work with your financial situation to determine a lending amount they can give you. From there, they are almost always able to offer you a car from their lot that fits in that lending amount. This way, people aren’t spending money on cars they can’t afford, and they can get a decent car without having to pay exorbitant prices.
But What are the Limitations to Car Buying Through a Buy Here Pay Here Establishment?
Each buy here pay here lot has its own rules, but there are specific lending rules at Auto Bank. These rules include:
- You must meet a particular age limit to buy through Auto Bank. In most instances, this is relegated to being 18 years or older.
- You must have a valid driver’s license. We, unfortunately, cannot let someone without a driver’s license take ownership of the car for legal purposes. You must be able to drive to be the owner of the vehicle.
- You must make a base amount (after taxes) per month. Usually, we require potential customers to make at least $1200 a month after taxes.
How Long Do I Have to Pay Off My Loan?
The length of the car financing repayment will vary based on person to person. However, most loans on cars will be shorter than the typical car repayment process. While many might hesitate, this opportunity affords borrowers the chance to spend less over time. Traditional lending options are designed to allow the borrower to pay the least possible amount. At first, this seems comfortable. However, a hard look at your bill over the length of your repayment period will show that you actually will end up having paid far more than you originally planned due to interest.
Most buy here pay here car lots offer short repayment terms with the ultimate goal being to spend the least amount over a short period. This helps buy here pay here lots by making a profit and being able to turn over their car inventory reasonably regularly, and this helps the buyer buy preventing high interest rates on their loans.
Additionally, on-time and consistent payments made to buy here pay here car lots like Auto Bank are reported to national credit agencies. These on-time payments are the perfect way to help you rebuild your credit and improve your credit score over time.
How Long Does the Application Process Take?
The application process is quick and easy, usually taking mere minutes for people to fill out. It requires you to know how much money you make but is available online so that you are not surprised by the information you are asked when you come into one of our locations. Each application will ask about sensitive information, like your social security number, but rest assured that this information will not be sold and will be kept confidential. Filling out an online application for credit approval before you come into the store will save you time and will allow one of our sales representatives to more easily assist you when you come in to purchase your car.
Do you have a varied credit history and require a new to you car? Auto Bank in Missouri can help you with your next purchase. With locations that serve the greater Kansas City metro, we can make getting a quality used car a breeze regardless of your credit. Visit us today at one of our Kansas City locations on Truman Road or East Front Street to see how easy it can be to buy a car with less than perfect credit.