How do I know if I have to use a Buy Here Pay Here lot?

Even with the latest credit slump, some banks are still buying down into the low 500'. Before you run off to that buy here pay here lot you should make sure that it is 100% necessary.  Below is a list of steps you can take to avoid a Buy Here Pay here dealership. I have organized it by time frames of how fast you need a vehicle. 

I have a few months before I need a car

• First things first, pull your credit! You can go to annualcreditreport.com and get all three reports for free. They won't however tell you what your score is for that you will have to come out the pocket. To learn what your score is I suggest you use Myfico.com where you can Monitor Your FICO® Score & Equifax Credit Report. There are a ton of places out there that offer this service but this one is straight forward and legit. If there are mistakes on your credit make sure to get them fixed. Typically you can challenge them right through the site. Visit the credit page If you need some tips to get back on track with your credit.  

• SAVE, SAVE, SAVE! Money talks when it comes to getting a loan with bad credit. Often times if you put a substantial amount down a bank will overlook certain credit blemishes.

• Join a credit Union Credit Unions typically offer fantastic rates even better then a bank and they are often very lenient with credit. If you are unsure where to find a credit union in pa I have compiled a list for you.

• Apply for a car loan ahead of time online Most car salesmen will tell you DON'T GO ANYWHERE ELSE IT WILL HURT YOUR CREDIT MORE! While that is partly true they are mostly just trying to prevent you from shopping around. The trick is in the timing, credit bureaus say it is ok to shop around for the best price. They do not penalize you if you have several inquires that are within a 7 day time frame. So make sure that when you start shopping for a car loan you are 100% ready to buy in the next 7 days. I have put together a list of sub-prime credit car loan companies, make sure to book mark that page for future reference if you are not ready to buy yet.

• If all else fails and you have to go to a buy here pay here dealership make sure you bring the bad credit car buying checklist with you!

I need a car like yesterday and my credit sucks!

• Empty out your piggy bank Try gather up as much down payment as possible. Again the less risk for the bank the more likely they are to overlook your bad credit

• Aim you sights low Buying a car is an emotional process and it's hard to make that payment on a car every month when you don't like to drive it. Sometimes though you have to look at the end game. If you have bad credit you are paying too much for a car loan no matter what. The quicker you can get into a state of equity (where the car is worth more then you have left to pay) the quicker you can dump it when you are in a better situation. Get something economical and keep your as term short as your budget will allow payment wise. A car dealership will always try to extend your loan out as much as possible because they make the most that way so you will probably have to ask them for a shorter term. 

• Apply for a car loan ahead of time online Most car salesmen will tell you DON'T GO ANYWHERE ELSE IT WILL HURT YOUR CREDIT MORE! While that is partly true they are mostly just trying to prevent you from shopping around. The trick is in the timing, credit bureaus say it is ok to shop around for the best price. They do not penalize you if you have several inquires that are within a 7 day time frame. So make sure that when you start shopping for a loan you are 100% ready to buy in the next 7 days. I have put together a list of sub-prime credit car loan companies, make sure to book mark that page for future reference if you are not ready to buy yet.

• Get a co-signer I try not to recommend this one being in the sub-prime car business I have seen the hardship is can cause between friends and family members. If you do go this route make sure that you try to stay well in your means on payment so that if something happens you can't control like a layoff you can still have a chance to keep the payments going. Also i feel I should note here NEVER BELIEVE THE CAR SALESMAN WHO SAYS "IT'S OK YOU CAN JUST REFINANCE IN A YEAR!" They are bold face lying to you to get the sale. The bank is NOT going to allow you drop their security on your loan it's just not rational for them to do that. Even if you refinance with another bank they will still want the co-signer on the loan.

• Again If all else fails and you have to go to a buy here pay here dealership make sure you bring the bad credit car buying checklist with you!

 When is a buy here pay here car lot better then a retail place?
Find out in this article when we explore the bottom line on a car loan.