No one should be discriminated against when buying a car
America is fascinated by automobiles and owning one brings a great deal of pleasure. To buy a car today, car loans are a prerequisite. But, for a bad credit borrower, a car loan seems like a distant dream. Do you have a poor credit score? Is it difficult for you to obtain a car loan? Are lenders constantly rejecting your vehicle loan application?
Well, if the answer to all the questions is yes, this article can help you get a car loan even with bad credit. In fact, after reading this writing, you will understand why now is the best time to take out a bad credit car loan to buy the car of your dreams.
Here’s Why Getting A Bad Credit Car Loan Is Easier Than You Think
Increase in vehicle sales
7.3 million – that’s the total number of vehicles sold in the first half of 2012! There has been a 14.8 percent increase in car sales since last year. This sale can be attributed to many factors such as car manufacturers driving car sales. Even European automakers find the US market profitable. They are competing for higher sales in the United States due to problems in its economy. With this new development, you can get newer car models and better incentive programs. In addition, the easy flow of credit has played an important role.
Lower delinquency rates
The delinquency rate is the percentage of car loans that have not been paid by the borrowers. TransUnion in its first quarterly report for 2012 mentioned that auto loan delinquencies dropped to 0.36 percent, which is well below the 0.46 percent result for the fourth quarter of 2011. These numbers have shown that borrowers are more serious and diligent in making regular payments.
TransUnion also mentioned that there is an increase in loans and leases in the subprime segment. With low delinquency rates, lenders can be more confident in the equation. Now they have understood that people will definitely make payments. When the general mood is positive, getting a bad credit car loan becomes easier.
Investors are buying securities made up of auto loans as they are comparatively safe and profitable. They do better than home loans because cars are a major requirement for us. We can give our house, but a car is necessary for our employment. This makes them a safe bet. The recent example of this is how companies like GM Financial, Santander Consumer USA, and other lenders have issued $10 billion of ABS related to subprime auto loans. This is a 20% jump from last year.
This deal demonstrates that auto lenders will now offer more poor credit auto financing options because it has become a lucrative option for them. They can easily bundle your loan as securities and make a profit on it. Therefore, auto finance companies are now taking risks by offering sub-prime auto loans.
All of these factors lead to a conclusion that lenders are now interested in providing you with bad credit car financing. It is no longer difficult to get a loan. It is no longer difficult to buy the car of your dreams!
Are you READY for a bad credit car loan?
Before you get a bad credit car loan, you should consider these important points so you don’t second-guess your decision later.
1. It is important that you choose an economical but efficient car. A used car is the most affordable option with you. It is a perfect option because its depreciation rate is lower than that of new cars. When choosing a car, don’t forget to check its title. Have it checked by your trusted mechanic.
2. If this is your first loan after your score plummeted, you should be ready to pay a higher interest rate.
3. Choose a shorter car loan term so you don’t increase any chance of a reverse car loan.
4. Regular payments are extremely necessary to improve your credit score and prevent it from deteriorating further. If you make your payments on time, you’ll get better interest rates next time.
5. Most lenders have a lock-in period during which you can’t refinance or trade in your car. This is usually the first six months or the first year of the loan term. So don’t choose any car loan that makes you uncomfortable because you’ll have to stick with it for a while. Take the time to analyze and select a bad credit car loan quote.
These significant signs are very crucial in coming to a good decision. You need to understand that bad credit auto loans are readily available, but you can make them more comfortable by remembering these points.
Now that you know how easy it is to get a bad credit car loan, wait no more. Once you consider all the points mentioned in the previous paragraph, you should begin the journey of regaining your old good credit.