Have you been turned down for an auto loan before? You’re not alone — more than 1/4 of the US populace are credit-challenged. Many banks, credit unions, and other traditional car lenders rarely approve car loans with common economic problems:
- Poor Credit
- No Credit
Luckily, many dealers have responded to this problem by offering in-house financing; that is, they lend to their customers directly.
In just 3 minutes, we can help you get approved for financing from one of the many buy here pay here car lots in our Arkansas dealer network. When you submit your application, our online service will go to work matching you to the best Arkansas buy here pay here car lot given your individual credit profile, income, down payment, and vehicular needs. With your credit already approved for financing, you can step onto the car lot with added confidence and negotiating leverage. It puts the fun back in car shopping, enabling you to focus on the car you want, not the financing you need approved.
Buy Here Pay Here Buying Tips
Most buy here pay here car sales are for used cars. This is usually the smartest option if your credit history is marred by bankruptcy, repossession, or poor credit in general. New cars depreciate to only 75% of their original value the moment the tires hit the street. That’s because you pay retail, but as soon as the car is sold, dealers will only pay wholesale to get it back.
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. 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.
A down payment is smart if you can afford it. It will cut your car payments considerably 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. 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 a BHPH dealer you’ll have a better chance to roll the value of your old vehicle into a down payment for your new one.
Budgeting for your New Car
Most financial experts recommend dedicating no more than 18-20% of your monthly budget to vehicle payments and costs. Remember that this includes more than just your car payment. Fuel, insurance , repairs, tag and title fees, and any other costs such as public transit or other cars all factor into this budgeting allocation. So if you make $2500 monthly, you should spend around $500 on combined vehicle costs.
Repairing your Credit with a BHPH Financing Deal
There are 2 common methods of repairing your credit : secured credit cards and big installment loans. Secured credit cards are designed to help those with damaged credit begin rebuilding their score. It is “secured” by a savings account that holds sufficient funds to pay off the card balance.
Big installment loans include auto and home loans. 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 payments on a timely basis, and your dealer reports your payments to the credit bureaus , then your new vehicle can be a powerful way to rebuild your credit.