Shopping for a new car, truck, or SUV in Arizona? Have you been turned down for an auto loan before?
You’re not the only one — more than 25% of Arizona residents are credit-challenged. Many banks, credit unions, and other traditional car lenders rarely approve auto financing with common economic hardships:
- Poor Credit
- No Credit
Luckily, many dealers have responded to this problem by offering in-house financing; that is, they lend to their customers out of their own pocket.
BuyHereNPayHere.com can help you get approved for financing from one of the many buy here pay here car dealers in Arizona dealer networks. When you submit your application, our online service will go to work matching you to the best buy here pay here car lot in AZ given your individual credit profile, income, down payment, and vehicular needs. With your credit already approved for financing, you’ll enjoy the following benefits:
- Maximized Bargaining Leverage
- More Confidence
- Zero Fear of Credit Rejection
- Increased Focus on the Car You Want
Arizona BHPH Financing Tips
Most buy here pay here car sales are for used cars. This is usually the best choice if you’ve had credit problems. New cars lose 20-25% of their value as soon as they leave the showroom floor. That’s because car buyers pay retail, but as soon as the car is sold, dealers will only pay wholesale to get it back. That means a steep drop in value.
So, for instance, you’ll suddenly owe $15,000 for a new car that’s worth only $12,000. The result is what’s known as an “upside down car loan,” and nobody who’s been caught underneath one is likely to recommend it, especially if you ever want or need to sell the vehicle before it’s fully paid off. After all, you’ll have to come up with the extra cash to pay off the loan — often several thousand dollars. A preowned vehicle, on the other hand, has already undergone this initial drop in value, so you’re less likely to fall victim to the burden of negative equity.
Putting money down is smart if you can afford one. Down payments will reduce your car payments and possibly improve the terms of your auto finance package. Fortunately, buy here pay here dealers are especially flexible when it comes to trading in your existing vehicle, even if it’s seen better days. Many dealers might not be as accepting of your trade-in if it doesn’t match the existing cars on the lot in terms of condition, age, and make. But with an AZ BHPH dealer you’ll have a better chance to roll the value of your old vehicle into a down payment for your new one.
How Much to Spend
Most financial experts recommend dedicating no more than 18-20% of your monthly budget to transportation costs.
Remember that this includes more than just your car payment. Gas, auto insurance coverage, maintenance, registration and title fees, and other expenses such as municipal transportation or other cars all factor into this equation.
There are two mainstay methods of rebuilding your credit score: secured credit cards and large installment loans. A secured credit card is used by people with poor or lacking credit to build some good credit history through timely repayments. It is “secured” by a savings account that holds sufficient funds to pay off the card balance.
Loans for vehicles or homes are another way to build your credit. Although most mortgage lenders are more discriminating about problematic credit history, a BHPH car dealer can grant you an auto financing loan. If you make your installment payments on a timely basis, and your dealer reports your payments to the credit bureaus (make sure they do), then your new car can be a powerful credit-boosting machine.