What to Expect when Buying a Vehicle with Bad Credit
If you have poor credit, the car shopping process can be daunting. A history of late payments, high debt, or bankruptcy can be a poor sign of credit trustworthiness. Fortunately, bad credit doesn’t have to stand between you and your new set of wheels, but you should be aware of how it affects your auto loan rate. At Lee Motor Company, we’re dedicated to helping our customers find the car that meets their needs, even if their credit is less than perfect. Find out what you should expect when buying a vehicle with bad credit.
First and foremost, there are several things you need to bring with you, whether it be to the bank or the dealership.
- Proof of Income: this can be your most recent pay stub, tax return, or bank statement. You want to be able to show you are actively employed and your year-to-date income.
- Proof of residence: Your residence will need to be verified in order to get a car loan. Bring a utility bill, mail with your name and address on it, and your driver's license.
- Proof of Insurance: All cars on the road are required to be insured. Bring the documentation your insurance provider gave you to keep in your vehicle. Ask your provider if you have any questions.
- Identification: You're going to need photo identification. This can be a driver's license, passport etc. No matter what, you will have to present a driver's license in order to take home a vehicle.
- Credit History: Any lender is going to ask about, and most likely pull, your credit history. While there is nothing you need to bring with you, the lender may ask for your Social Security number.
- Trade-In Information: If you're trading in your vehicle, you will need to bring in any documentation for that vehicle, like registration, and title papers.
How Does a Low Credit Score Impact Your Purchasing Power?
Your credit score tells lenders your credit worthiness and will range from 300 to 900. Excellent scores are over 800, credit scores between 600 and 800 are considered average, while scores below 550 are considered risky. Your credit score considers the length of credit history, missed payments and late payments, your credit mix, and any past bankruptcies. Auto lenders view less than desirable credit around 500. If you have poor credit, you should know that the application process will be a little more in-depth than if you were to have excellent credit.
What to Know About Purchasing a Car with Poor Credit
When shopping for a new or used vehicle with poor credit, you’ll want to be prepared to talk about your credit history and current financial situation. This allows the lender to get to know your credit history, as well as your background like how long you’ve lived in your home, and how long you’ve been employed at your current job. Additionally, it’s also important to realize that those with great credit are going to get the best financing available. With less than perfect credit, your auto loan rate may be a little higher. To fight sky-high interest rates, work with a dealership that has experience working with those who have less than perfect credit and strong relationships with local and national lenders, like Lee Motor Company.
Improving Your Credit Score
Raising your credit score can help you get into a better vehicle and better auto loan rates. Clean up your credit by paying anything that’s past due, disputing credit report errors, and adding positive information to your credit report. Avoid additional bad credit items, like new credit cards. If you need help figuring out what to attack first, we may be able to refer you to a banker or financial adviser that can help.
Shop for A New Car – Get Approved Today
When you get pre-approved for an auto loan, you can shop with confidence and work realistically with the dealership on your budget. To get a jumpstart on the car shopping process, fill out our no obligation credit application today.
Get in Touch with The Financing Team at Lee Motor Company Today!
Buying a car with less than perfect credit isn’t always desirable, but it is not impossible. The team at Lee Motor Company will be happy to assist you and guide you through the process. We have experience working with those who have bad credit and no credit at all and can offer guidance to get into a reliable vehicle at a price that meets your budget. Learn more about our financing process and get in touch with us to start car shopping.