Bad Credit Car Loans

The reasoning is, “If you have custody of the car, they can’t sell it to someone else.” If you have your down payment and documentation in hand, insurance up to date and need a car desperately, you may want to take the new vehicle home. However, consider this scenario before palming the keys. How will you feel if the dealership calls and says you must come in and do more paperwork? Will you be disappointed if the bank says “NO”, and you have to give back the car? Will you be angry if the payment you negotiated and signed for goes up? If you are going to get upset over any of these possibilities, have the dealership provide a bank approval before you take the car off the lot.

The future of a second chance-high interest loan. While you can elect to refinance the loan at anytime, most consumers find that without additional down payment at the time of refinancing, a lender will not negotiate a lower interest rate loan in less than two years. Pay the auto loan perfectly. The alternative finance lenders keep internal records and ratings that they share amongst themselves, when evaluating risk. If you are consistently paying the bill on the tenth day, this information is noted and an “internal score” is denoted for your behavior. Slow pay equals no-pay. Slow pay indicates you are having trouble making the payment, and the lender isn’t getting the interest in a timely fashion. This track record greatly reduces the likelihood of you’re refinancing at a lower rate.

After several years of perfect payment history in all aspects of your life, you should be able to purchase another vehicle at a rate commiserate with your credit score and average quality credit. Keep this pattern going and in five years you will be in great shape for the vehicle of your dreams.

Visit MyCarLady.com for help with your next new or used car purchase. Or email Sarah at sarahlee@mycarlady.com.

Sarah Lee © The CARLADY