When you want to purchase a car, there are a few different options; you can trade your existing car in for another one, pay cash, get a loan from a third party, or get a loan directly from the Tampa dealership from whom you are buying the car from.
If you are looking to get a car and you have low credit or no credit, but you know you will need financing for the purchase, this can be a great option for you. Most Buy Here, Pay here dealerships are used to working with customers who have poor credit or no credit.
But before you decide to go the route, you should educate yourself on both the pros and cons to “Buy here, pay here ” in-house financing.
Here are some things to consider:
If you are interested in building your credit through your loan, then you want to verify that the dealer you are purchasing a car from actually reports to all three credit reporting agencies (Experian, TransUnion, and Equifax).
Most legitimate dealers who provide loans do report to the credit reporting agencies, but a quick call to double check before you car shop on their lot would be smart.
If you make regular on-time payments this will really help your credit repair itself or grow.
There really shouldn’t be any negative impact to your credit score by applying and getting a loan from a “Buy, Pay” dealer, unless you simply just stop making the payments and they report you.
It is wise to check your credit before you go shopping for a car with a dealer.
You may qualify for a traditional dealership that works with medium – low credit.
If you have really low or no credit at all, you should still print a credit report and bring it with you so you don’t have to go through an entire application only to get rejected.
Furthermore, reviewing your credit regularly is smart so you can protect yourself from any identity fraud or if there are items you need to dispute.
Improve Your Credit Score – If you aren’t needing a car right away, work on building your credit. Make sure you pay things on time. Review your credit report to see what is hurting your score and focus on repairing it. If you have family members with great credit, you can ask them to co-sign a credit card for you and make regular, on-time payments to boost your score.
Get Someone to C0-Sign on a Car Loan – If you have someone you trust who has excellent credit, ask them if they can co-sign on a car loan with you. Many Orlando fl dealers look at this as a way to reduce risk on a loan and they will approve you more quickly.
Second-Chance Auto Loans – Second-Chance loans are for people to have low credit because of unfortunate circumstances. For example, you lost your job and couldn’t pay your bills, etc. Second-Chance lenders look at your income, spending, expenses and overall lifestyle to determine if you qualify. If you are simply just irresponsible and don’t pay your bills, this won’t be a good option for you.
However, if you have low credit because of situations out of your control, but are overall good with your money, have a steady income, and spend wisely, this is a great option.
Borrow from a Local Credit Union or Online Auto Lenders – Some Credit Unions and Online Auto Lenders have lower approval standards for car loans. Many of them generally have lower interest rates as well. It is worth calling around and looking online for some of their approval standards of buy here pay here to see if you qualify.
“Purchase Here, Pay” loans are sometimes the only option but before you commit to this type of financing, you should exhaust all of your other options.