Interviewed by BHPH Prices
See the full interview at http://bhphprices.com/articles/interview-with-brian-metzger-of-vigo-car-credit/
Disclaimer: Certain sections of this blog post were reprinted with the expressed permission of Vigo Car & Credit
Please give my readers a history of Vigo Car & Credit. How long has your car dealership been in business. How many locations do you currently have?
We opened our first location in Terre Haute in 2010. Since then we have opened Carmel (Indianapolis), Muncie, Cincinnati, and at the end of this month we will be opening our fifth store in Kokomo. The premise when developing Vigo was to take what we did not like about our years in the BHPH business and change it. During the past 3 years we have not changed our mission. We are still offering the same newer cars, with lower mileage, lower interest rates, and full warranties. We also continue to find new ways to make the buying process easier by developing new programs like our complete “Buy it Now” over the internet feature. Our full program is are outlined here
Does your dealership primarily sell domestic or foreign used cars. Or would you say it’s a mix of both?
We stock our locations with a mix of both. Domestics typically account for 70% of our sales so we structure each locations inventory to reflect that.
If a person has bad credit how do you suggest they improve there credit? What advice would you want to give that person?
Having a bad credit rating can make life much more difficult and frustrating. There are plenty of good people that have gotten into unfortunate situations that have caused their financial situation to be of high risk to lenders. For people who have a low credit score or have encountered some serious delinquency in the past and are in need of transportation, turning to a reputable buy here pay here dealership can repair their credit.
There are two mainstay methods of repairing your credit. Revolving credit and significant installment loans. A credit card would be considered a revolving debt. There are many companies that will provide secured credit cards to consumers with slow pay histories. A secured card is used to build good credit history by making timely repayments. It is “secured” by a savings account or deposit that holds sufficient funds to pay off the card balance. Essentially you are borrowing from yourself but this process is effective in starting the credit rebuilding process. Large installment loans include automobile and home loans. Although most mortgage lenders are more discriminating about problematic credit history, a buy here pay here dealer can grant you the installment loan that is necessary to the rebuilding process. If you make your payments on the day they are due, and your dealer reports your payments to the credit bureaus, then your new vehicle can be a high horsepower way to rebuild your credit.
If a person has just declared bankruptcy and they want to buy a vehicle, what do you suggest they do?
It depends on the type of bankruptcy that they are in. If they are in Chapter 13 then they should first speak with their attorney/trustee in order to gain approval to purchase a new vehicle. Once they gain a tentative approval from them they can begin to look for a vehicle. The dealership will provide them with a printout of their potential contract to take to the attorney/trustee for final approval of terms.
If in Chapter 7 the customer will need to wait for discharge to accrue new debt. No matter which bankruptcy the customer currently has they should outline a budget for how they will live after BK and stick to it. Learn from the previous credit decisions made and make sure not to repeat them after their clean slate. For example, if the customer included a vehicle in their bankruptcy that had a payment of $480 it would most likely be in their best interest to find a vehicle with a lower payment now. It is easy to escalate your credit profile to the same place it was just before your bankruptcy. The mentality that “Well, I couldn’t afford it back then because I had all those credit card bills” is not the best to keep. You may not have those bills now but a vehicle loan is scheduled to last several years, there is a good chance that you may accrue a few more of those bills again over that time and find yourself back at square one.
Should a consumer run their own credit report before they purchase a used car?
It’s a case by case scenario. Typically a credit challenged consumer already knows what they have or have not paid for. The dealership that they go to will be asking them for some specifics including dates of previous repossessions. If the customer is not sure of the dates then pulling a report could be used to make sure that they have the most honest and accurate information to provide the company when completing a application for financing.
If your divorced and as a result of that divorce have bad credit, what tips would you offer the consumer on how to obtain a loan?
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. The best 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 to prove what debts showing on your credit report are actually ones you are obligated to pay for
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
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.
What questions should the consumer ask the BHPH dealer when they walk into the car dealership?
There are four general ideas that stick out to me. The key is to get this information from multiple dealers so you can make the most informed decision on who has the best program.
1. Ask for a full program explanation. This gives the dealership the opportunity to explain exactly how they operate and what they offer. Take notes so you can compare the different dealerships that you visit at a later date.
2. What is their niche vehicle? Meaning what Years, Mileages, and Price ranges do they like to carry. For Vigo Car & Credit we like the less than 6 year old under 80,000 mile vehicle ranging in price from $11,000 to $18000.
3. Does the vehicle come with a warranty? Be sure to get full details on what is covered, what the deductible is, where you take it to get repairs, what the length of it is including term and miles, and whether the warranty is through the dealership or a 3rd part company.
4. What are the finance terms? Pay special attention to the down payment, term, interest rate, due dates, late fees, where to pay, and if the payments will be reported to your credit. Be sure to ask what happens if you do not have the full down payment, sometimes it is added to your first two payments which may not be in your best interest or financially possible. You do not want to set yourself up to fail
Once you have visited a few dealers and you have you have compared the four items then turn to Google. See what the dealerships social media presence is. A dealer that is the most active on Facebook, Twitter, or LinkedIn will generally handle future problems you may have quicker. An active social media company opens themselves up to the risk of being able to receive public negative feedback since they are easily accessible through these channels. Pay attention to how they respond to the negative feedback and get a feel for the dealers personality. At this point it should be a clear decision as to who you should send your business to.
Vigo Car & Credit
This is our twelfth interview in our “1000 Interview Challenge” If your interested in an interview, please contact me.