Car Buying Tips for a Credit Challenged Consumer
The very first thing to do is to remain realistic with your present predicament and follow the steps to eventually achieve the vehicle of your dreams. Buy here pay here dealers strive to carry affordable point A to point B transportation. A vehicle that you desperately need to get you back and forth to work or doctors appointments may or may not have leather, four wheel drive, and a moonroof.
Research the dealers that provide the specialized financing that you need in your area. Make sure they look reputable, treat you like you’re a millionaire, report to the credit bureaus, and have a program that is easily explained to you. Check to make sure that you are able to pay the loan off early and shop for the vehicle based on the program not the car itself. The lot with your favorite car may not have the best program to help you fix your situation.
Prepare yourself. This is vital in making sure you get the lowest down payment possible. Get your paperwork ready. The more information you provide to the lender the less risk they feel they have. Here is a list that will help you get started.
-Proof of income (pay stubs, child support, taxreturns)
-Proof of insurance and a full phone bill
-Proof of residence (lease or mortgage paperwork)
-Current driver’s license
-References name address and phone # (total of 10)
-Divorce decree if applicable
Clean your trade in so you will receive top dollar. Buy here pay here dealerships tend to put more value in a vehicle than traditional car dealers because they are more likely to resell your vehicle on their lot rather than taking it to auction. Make sure that the dealer will use your trade value towards the down payment of your new car in order to save out of pocket expense. Be prepared with realistic expectations on the value of your trade. Use the following sites to help price your specific car:
-Kelly Blue Book www.kbb.com
A Vehicle depreciates to only 75% of their value the moment the tires hit the street. That’s because new buyers pay retail, but as soon as the car is sold, dealers will only pay wholesale to get it back. For example, you may find yourself owing $5000 for a car that is only worth $3750 resulting in an “upside down car loan”. The only way to fix this is to pay the difference or try to get a lender to add the balance to the new loan. However, that will just put you in the same situation all over again.
Take your vehicle to the mechanic of your choice before you purchase. Do not trust the dealers mechanic for obvious reasons.
Finally. Make sure you understand and fulfill your contract exactly as it reads to prevent wage garnishments and further damaging your credit rating.