Getting a new car can be an exciting time, but if you have bad credit, it can be more stressful than fun
If you’ve been turned down for a car loan before, you’re not alone. According to data from the Federal Reserve, more than 7% of car loan applications were rejected in 2019 and data seems to show this number increased in 2020. But having bad credit doesn’t have to mean kissing your dream of a new car “goodbye.” Instead, you need to find the right lender who can help you secure the auto financing you need.
The first step to getting car loan when you have bad credit is to understand your credit score. Request your credit score range on the Parkwood Automall website and our finance department will rush your information to you with no cost or obligation. You won’t get a full credit report or a generic score like the ones provided by free credit score lookup services like Credit Karma, but instead will be based on the same information auto lenders use to make their borrowing decisions.
Credit scores can range from 300 to 850 at the highest. For most credit rating bureaus, a bad credit score is anything below 630. While it is still possible to obtain an auto loan with a credit score under 630, you will likely be looking at a bad credit car loan. A bad credit score can have many contributing factors. A late monthly payment or a missed payment on a loan or service that reports to a credit bureau is often the primary cause of low credit scores,however having a low income-to-debt ratio, too many credit inquiries, and too many new credit lines can also lower your credit score.
One of the fastest ways to improve a poor credit score is to make any late or missing payment sand bring all your accounts up to date. There are many services that offer to improve your credit situation, but these services should be thoroughly investigated and vetted before you choose to proceed, especially if the service requires payment. Getting a bad credit car loan[/car-loan]can also help you to improve your credit score as long as you are able to make your monthly payment. While a sub prime auto loan may have a higher interest rate than you see at a “buy here, pay here” dealership, it’s often the best choice for car buyers looking to improve their credit score as dealerships that offer in-house financing don’t always report to the credit bureaus.
We make it easy to get an auto loan, even if you have bad credit, at Parkwood Automall. Our in-house finance experts work with a huge network of local and national car loan lenders including those who offer sub prime auto loan options. We’re one of the only dealerships in New Jersey that work with Exeter, one of the nation’s leading auto lenders for car buyers with a bad credit score. Applying for a bad credit car loan can be done right from our website or you can come to the dealership to work with one of our financing professionals.
There’s no reason to go to a bad credit car dealership when you can shop the exceptional selection of vehicles at Parkwood Automall. There are a few things to keep in mind when shopping for a new car whether you have good credit or bad credit. One is to look at the total price of the vehicle, not just the advertised price. An upfront car dealer like Parkwood Automall should always make it clear if there are any charges or fees that are not included in the displayed price. This will help you understand the true cost of the vehicle. It’s also a good idea to seek out a car dealership that offers some type of warranty or vehicle coverage so that you don’t have to worry about how to pay for an expensive fix should something occur.
When you think of a “bad credit car dealership” you may think that your options are limited,but you have options!
Getting a traditional bad credit auto loan can be an expensive option in the short term, butis agreat way to build your credit score back. While the interest rate you initially pay may be quitehigh, there is always the ability to refinance for a lower rate once you’ve made improvementsto your credit score.
Another option is to enlist the help of a “cosigner.” A cosigner is a person with good credit who can sign along with the applicant who has weak credit. The cosigner agrees to be responsible for making loan payments in the event that the original borrower defaults. A cosigner can help you to secure auto financing with a much lower interest rate than you may be able to achieve on your own.
The last option is to go to a traditional bad credit car dealer. It’s a good idea to look into anybad credit financing options you are offered at these dealerships as they may have hiddenlanguage or some other sort of “gotcha” like a late payment or other fees that could actuallymake your situation worse.
The interest rate on a bad credit car loan is likely to be quite high, usually over 20%, but your interest rate makes up just one piece of your monthly payment. If your poor credit means that you have a high interest rate, you can take control of your car loan payment amount in other ways. The easiest is to find a vehicle that has a lower overall sale price. The less money you borrow overall, the less you’ll have to pay per month. Another option is to look for a longer loan term. If you can spread your payments out over a longer period, you will need to pay less per month (although you may end up paying more overall.)
Parkwood Automall is a great place to start shopping for a car if you have poor credit. We help car buyers from all over New Jersey, New York, and beyond to purchase quality used cars from top auto brands like Audi, BMW, Land Rover, and many more regardless of their current credit score or credit history. Our team of bad credit auto financing experts are here to help you find the car, truck, van, or SUV you need at a monthly payment you can afford.