Buying a new car is a great experience, especially when you can get the financing you need to get into the vehicle of your choice. If you are worried about getting approved for vehicle financing either due to bad or no credit, use this guide to increase your chances of getting into the car of your dreams.
Choose in-house financing
In-house financing means that a dealership is the one taking over your auto loan, not an outside lender. This may make it easier to get your car financed since the dealership isn't bound to credit limits or other stipulations that can block you from getting the financing you need. You can increase your chances of getting in-house financing when you don't have any money to put down on your purchase by taking the asking price of a vehicle, which can be enticing for a car dealership on a business level since they will make a greater sale.
Have a large down payment
The less money a dealership or an outside lender has to finance for your vehicle purchase, the more likely you will be able to get an auto loan when you have little credit or a poor credit history. As a general rule, you will want to have at least 20% of the car's price to pay as a down payment in order to get financed or achieve financing with a lower interest rate. The more money you have on-hand to put down on a car, the more options you may have to purchase from as you seek financing.
Pay off recent debt
Car financing companies often look at your most recent debt, such as medical bills, to determine your credibility with money. Pay off or pay down the debt that shows up most negatively on your credit report to put yourself in a better light. If you have credit cards try to stay away from the upper limits so your debt-to-income ratio looks much more positive. If you have no credit, get a prepaid credit card at your bank to pay your most recent bills with to show some kind of credit responsibility. A prepaid card is funded by your own money to give you confidence as you make purchases and lower your chances of maxing out or going over your card and obtaining negative overages.
As you search for your new car, make sure you stick to your budget so you don't overwhelm yourself with monthly payments that are too high. Talk to your dealer about the monthly payments you can expect with your financing options so you can pick cars that fit within this budget best. For more information, contact companies like Leopardi Auto Sales.Share