Buying a car can be stressful, but you need transportation to get you back and forth to work, the kids to soccer and ballet as well as to run errands around town. When you have bad credit, the car buying process is even more stressful. One of the ways to take away some of the stress is through guaranteed auto credit. Designed for people who have bad credit or who have not built a credit history yet as they are newly graduated or recently moved to the country, guaranteed auto credit for automobile purchases can get you behind the wheel of a car sooner and help you begin rebuilding your credit.
How It Works
Many car dealerships, whether they deal with new or used cars, are reluctant to offer automobile loans to people whose credit is less than perfect. The reason for this is that those dealers use finance companies and banks who have stringent requirements for lending. They may require high down payments if your credit isn’t perfect or may simply refuse to work with you. Guaranteed auto credit cuts out the middle man by offering payments directly through the dealer. You make your payment directly to the dealer who places a lien on your vehicle until it is paid in full.
Risks and Benefits
The risks of guaranteed auto credit are about the same as any other type of auto financing. You must pay interest on the loan, just as you would if you took out a traditional auto loan. If you make a payment late, there are late fees, something that also happens with traditional auto financing. It is important to only agree to a payment you can afford in order to avoid late payments. The benefits, however, far outweigh the risk. When you have poor credit, many dealers, banks and finance companies will not even talk to you about a loan. They will advise you to repair your credit before applying for a loan, something that can take years. With guaranteed auto financing, you will get a loan regardless of your credit score. If you pay on time as promised, you can even see improvement in your credit score.
Requirements for Loan
You will need to have a steady income in order to be approved for a guaranteed auto loan and you will need to provide proof of that income through paycheck stubs or other means. You will need to provide valid photo identification and proof of residence. Most lenders will accept a utility bill, lease or mortgage as proof of your residence. You will also need to provide personal information such as your date of birth and social insurance number.
Terms and Conditions
One of the benefits of guaranteed auto financing is that you may be able to extend the time you will pay for the vehicle. Banks and finance companies often limit the terms of a loan, inflating the payment in order to get the vehicle paid in full within the time required. Because guaranteed loan companies work independently, they may be able to keep your payment lower by extending the time you will pay the loan. Keep in mind that extending the loan increases the amount of interest you will pay over time, but it may help you get a payment you can afford more easily.
If you have bad credit or are just starting out and have no credit history, contact us today to learn what products we have that can help you get behind the wheel of a car as soon as possible. Guaranteed auto credit is an excellent way to begin rebuilding your credit and get on the road to financial security.