Buying a car with bad credit

[Trent Reznor]

[quote name="King Au" url="/t/611515/buying-a-car-with-bad-credit#post_21970004"]If you have bad credit no bank will approve you on a loan regardless how much you put down, and if you are getting a car loan there's usually a minimum amount you'd have to take out, usually around 7500. [/quote]


This is simply not true. I was a subprime lender for 5+ years. 20% CASH down, I'm GETTING you a car. With that much down the ODDS are someone won't just walk away from the payment. They're already too invested in it.

You can get a auto loan for $1,000 if thats what you need.

Having a co-signer is tricky business for lenders. MOST of the time I disregarded cosigner info. I KNEW they were only there to try and get a better rate and the car wasn't for them. I still hit them with a subprime rate. I was also very investigative with this. A lot of people would bring grandmom in for a co sign and she didn't even realize she was apart of the loan. I'd conduct an interview with the cosigner to see their true intentions.

They would also sometimes try to outright just sign for someone else which I had to be VERY aware of. (straw purchase.)

I havent been in the business in a long time so I'm not sure how interest rates are nowadays but back then I was hitting you with 20-25% interest.

STAY AWAY from 72-84 month deals if you can. Pay a little more per month for 48-60. You're gonna kill yourself in interest with those long deals.

The only time I WOULD NOT attempt to give you some kind of a loan is if you had TWO repos. Yes, I would give you a chance with one repo on your record if it made sense.

Be prepared to show at least two months of pay stubs and possibly your tax returns. Proof of residence AND your car MUST be insured WITH proof before you leave the lot.

If you can prove you're putting 20% REAL CASH down, I'm giving you a car loan, period.

 

[Trent Reznor]

And my last piece of advice. STAY AWAY from cars that drop significantly in value when you leave the lot and even more in a few years unless you get a fabulous deal. You'll wind up being upside down on the value and be in an even bigger hole if you want to get a new car.

 

[bigboss]

Damn man you require way more to get approved then us. I can work with $500 down on majority of customers then break up the tax, doc fees etc. Payments are 3-350 a month for no more than 42 payments. All cars come with 90 day warranty and no charge oil changes for the first year.

Have to been on job for 6 months or so minimum and proved check stubs plus lived in this area for a decent amount of time, minimum income of at least $1,300 gross per month.

I've put people in cars with up to 3 repos as long as they had other cars that had been paid off. I've seen people with scores in the 3s before

 Our average customer is 450-500 or so.

 

[fac3 tak30v312]

 

Making decisions like that, no wonder those people have such bad credit...

Huh?

Not paying your bills on time and going on shopping sprees with credit cards when you don't have the money is what gets people bad credit.

Having to pay high interest rates or put 2-3k down is the after effects. Majority of people that come in know they have **** credit and understand the high rates.

Where exactly is the data you have to back this up. Oh that's right you talking about your mans an dem.. making generalized statements based on the actions of the people you associate with.

Personally since I didn't have a long credit history and was a first time car buyer, I had no choice but to put down at least 1.5k

 

[bigboss]

Where exactly is the data you have to back this up. Oh that's right you talking about your mans an dem.. making generalized statements based on the actions of the people you associate with.

Personally since I didn't have a long credit history and was a first time car buyer, I had no choice but to put down at least 1.5k

Mans on dem? What the **** does that even mean?

My data comes from the credit reports I view everyday. Every person I look at has unpaid bills from at least one cell phone provider and multiple credit card charge offs. I had one guy the other day that literally had a charge off from every store in the mall that has a CC.

Those statements are facts about the subprime market, not personal attacks on their character. Pull that skirt down.

 

[fac3 tak30v312]

I don't know even know where to start though, do I just go to the dealership or get pre approved first

You should try to secure a loan with your local credit union first. Also you should research and know the car you want before you walk onto any car lot. Finally have a hard line on what interest rate you're willing to pay and research the loan company before signing any paperwork

 

[Trent Reznor]

Damn man you require way more to get approved then us. I can work with $500 down on majority of customers then break up the tax, doc fees etc. Payments are 3-350 a month for no more than 42 payments. All cars come with 90 day warranty and no charge oil changes for the first year.

Have to been on job for 6 months or so minimum and proved check stubs plus lived in this area for a decent amount of time, minimum income of at least $1,300 gross per month.

I've put people in cars with up to 3 repos as long as they had other cars that had been paid off. I've seen people with scores in the 3s before :x  Our average customer is 450-500 or so.

Yeah but you're at a buy/here pay here spot. Rules are WAY different. I was working for Wells Fargo, then a private bank. We HAD to be more structured just on the volume of loans. I was LOOKING at 100+ credit reports every day. I was the lead for two whole states.

You guys still have the automatic shut offs too? That goes a LONG way in "giving someone a chance" too. hahah. I remember dating a girl years ago that was in a buy here pay here. When she told me her car was shut down for non payment I was like, "thats REALLY a real thing!???"


Oh yeah with me DTI HAD to be

 

[360waves]

Whatever you do don't make minimum payments. For me my car note is 235, I put 300 the rest just stacks on the principle. Will knock it out in 24 months . My credit wasnt bad but it wasnt great. Good luck

 

[fac3 tak30v312]

Where exactly is the data you have to back this up. Oh that's right you talking about your mans an dem.. making generalized statements based on the actions of the people you associate with.


Personally since I didn't have a long credit history and was a first time car buyer, I had no choice but to put down at least 1.5k

Mans on dem? What the **** does that even mean?

My data comes from the credit reports I view everyday. Every person I look at has unpaid bills from at least one cell phone provider and multiple credit card charge offs. I had one guy the other day that literally had a charge off from every store in the mall that has a CC.

Those statements are facts about the subprime market, not personal attacks on their character. Pull that skirt down.

So let me get this straight. Somehow you made the stretch from charge offs on a credit report to meaning that these people were "balling out of control with money they did not have." You provided no data on the frequency of its occurrence vs customers with no chargeoffs or the story behind these chargeoffs. Simply based on what you provide in your post you are again using a small sample size to broad stroke your own personal feelings.


I would also say to OP to remember that people like "BIGBOSS" might be sitting across from you when it's time to sign your paperwork. So it is imperative that you know exactly what you want and know exactly what is on your report


EDIT: Nevermind BIGBOSS. I've just realized where you work at and why your personal opinion on the matter is so skewed. My fault for not ready through the thread

 

[bigboss]

Yeah but you're at a buy/here pay here spot. Rules are WAY different. I was working for Wells Fargo, then a private bank. We HAD to be more structured just on the volume of loans. I was LOOKING at 100+ credit reports every day. I was the lead for two whole states.

You guys still have the automatic shut offs too? That goes a LONG way in "giving someone a chance" too. hahah. I remember dating a girl years ago that was in a buy here pay here. When she told me her car was shut down for non payment I was like, "thats REALLY a real thing!???"


Oh yeah with me DTI HAD to be <50% and PTI HAD to be <20%.

Oh yeah we the bank too lol But we still have to fall into certain payment terms and none of them are over 3.5 years.

Hell yeah we have the shut offs. There was another thread about a NY Times article about how people get their cars cut off in the middle of traffic on a hot *** summer day and that's FALSE. Its a switch that stops the car from being able to be started.

 

[Betonblck]

Financing a car when you have bad credit is a horrible financial decision that you will regret unless you have a cosigner with good credit.

Paying 20-30% interest, just terrible.

Did you make a suggestion?

Take the bus or buy a car they can afford for cash.

 

[heliumclinton]

Financing a car when you have bad credit is a horrible financial decision that you will regret unless you have a cosigner with good credit.

Paying 20-30% interest, just terrible.

Did you make a suggestion?

Take the bus or buy a car they can afford for cash.

Every city has public transportation? I didn't even know

 

[bigboss]

So let me get this straight. Somehow you made the stretch from charge offs on a credit report to meaning that these people were "balling out of control with money they did not have." You provided no data on the frequency of its occurrence vs customers with no chargeoffs or the story behind these chargeoffs. Simply based on what you provide in your post you are again using a small sample size to broad stroke your own personal feelings.


I would also say to OP to remember that people like "BIGBOSS" might be sitting across from you when it's time to sign your paperwork. So it is imperative that you know exactly what you want and know exactly what is on your report

Man what is your deal? You act like I turned your mom down yesterday on a loan. If you get a CC charge off  that means you spent money you didn't have period. I see this everyday when I pull peoples credit, is that enough frequency for you? This is not a sample size its how the subprime market is like I already stated. Do you work with people that have poor credit? I don't think so.

I'm not the bad guy, I just do my job. Mature adults know what's on their report and why it is. A lot of times they have a valid reason to why they got behind and we believe them and get them approved.

You sound like a little ***** right now. Like one of those guys that blames the man for **** he did to himself.

 

[nawghtyhare]

So let me get this straight. Somehow you made the stretch from charge offs on a credit report to meaning that these people were "balling out of control with money they did not have." You provided no data on the frequency of its occurrence vs customers with no chargeoffs or the story behind these chargeoffs. Simply based on what you provide in your post you are again using a small sample size to broad stroke your own personal feelings.



I would also say to OP to remember that people like "BIGBOSS" might be sitting across from you when it's time to sign your paperwork. So it is imperative that you know exactly what you want and know exactly what is on your report

Man what is your deal? You act like I turned your mom down yesterday on a loan. If you get a CC charge off  that means you spent money you didn't have period. I see this everyday when I pull peoples credit, is that enough frequency for you? This is not a sample size its how the subprime market is like I already stated. Do you work with people that have poor credit? I don't think so.

I'm not the bad guy, I just do my job. Mature adults know what's on their report and why it is. A lot of times they have a valid reason to why they got behind and we believe them and get them approved.

You sound like a little ***** right now. Like one of those guys that blames the man for **** he did to himself.

Isn't subprime lending the reason banks got bailed out???
Crazy how banks needed a loan
But frown or pray upon other that need it as well
Praying on people who aren't good at managing money or can't afford things
And I know some folks like "well they deserve it if the can't afford it"
Sometimes when u grow up not having a lot
And have a chance to get something u wanted all common sense goes out the window
Not speaking on u per say about subprime lending
Just in general sucks credit means so much nowadays
And hard working people have so much trouble with it
Sometimes people mess up their credit when they're young
Then when get older and know better have tough time rebuilding
I wasn't really taught about credit growing up
I'm sure it lead to my early troubles with credit
Tryna get it back on track
My mom Dealt mainly in cash
Moms ended up buying a house
She put down 25 racks straight cash

 

[bigboss]

You're right, I see hard working people every day that we cant approve because of poor decisions and not enough income or down payment.

But we do help them build their score back up by turning it in.

No one is getting preyed on though, no one forces you to come in and try to get a car from us.

But to not put the majority of the blame on the person doesn't make much sense either.

Credit means a lot because without it how would we know if you're going to pay for your car? Just give us your word and a handshake? lol it is how it is, nothing will change that.

 

[Trent Reznor]

I always joke with my friends that I was part of the reason of the economy's collapse.

But in reality, its at least partially true. I KNEW at the time what I was doing wasn't smart business, but it made me A LOT of money and I was very young.

I couldn't be the type of analyst I was back then just morally. I was a shark. I gave AS MANY loans out as I possibly could. It wasn't "my" money.

I used to frown on the older guys just being happy with their salary and not striving for bonuses. I now "get it." I am now one of those guys.

 

[harlemtothebronx]

Take your time. Rebuild your credit a bit. I don't know how bad it is, but if you can get your credit score in order it will ease the whole process.

I'm currently trying to get my score as high as possible before I go for an auto loan, because I'm sure insurance is going to kill me considering I'm a first time driver and I live in New York. Gotta either keep them payments as low as possible PR pay for the whole car outright.

 

[crcballer55]

 
Damn man you require way more to get approved then us. I can work with $500 down on majority of customers then break up the tax, doc fees etc. Payments are 3-350 a month for no more than 42 payments. All cars come with 90 day warranty and no charge oil changes for the first year.

Have to been on job for 6 months or so minimum and proved check stubs plus lived in this area for a decent amount of time, minimum income of at least $1,300 gross per month.

I've put people in cars with up to 3 repos as long as they had other cars that had been paid off. I've seen people with scores in the 3s before

 Our average customer is 450-500 or so.

Once again... People taking out a car payment of $350/mo. on a GROSS income of $1300/mo? With a payment that high, their priorities are completely out of wack and is once again a good indicator of why they have bad credit and can't afford to pay their bills.

 

Financing a car when you have bad credit is a horrible financial decision that you will regret unless you have a cosigner with good credit.

Paying 20-30% interest, just terrible.

While I agree with this, most of my customers have no other option because they have to go work and take family places. Taking a bus isn't an option for some, so they just bite the bullet.

There is actually a third option. Buy USED and pay CASH. If you look on Craigslist, there are PLENTY of cars in the $3-5000 range that aren't complete junkers. For someone to protect themself, take it to an inspection place to have it checked out. It shouldn't cost more than $70 and will give you good peace of mind before making the purchase.

 

[bigboss]

 
Once again... People taking out a car payment of $350/mo. on a GROSS income of $1300/mo? With a payment that high, their priorities are completely out of wack and is once again a good indicator of why they have bad credit and can't afford to pay their bills.

There is actually a third option. Buy USED and pay CASH. If you look on Craigslist, there are PLENTY of cars in the $3-5000 range that aren't complete junkers. For someone to protect themself, take it to an inspection place to have it checked out. It shouldn't cost more than $70 and will give you good peace of mind before making the purchase.

True on both statements. I would try to buy a car in cash way before paying 29% interest rate. But we do offer a warranty and our cars are a lot nice then whats on CL.

 

[nawghtyhare]

You're right, I see hard working people every day that we cant approve because of poor decisions and not enough income or down payment.


But we do help them build their score back up by turning it in.

No one is getting preyed on though, no one forces you to come in and try to get a car from us.

But to not put the majority of the blame on the person doesn't make much sense either.

Ur right but
On the nobody is forcing u to come in thing
Man sometimes with the things going on u NEED a car
So yeah nobody forcing them
But honestly being a on adult and working and having responsibilities
A car is important for getting around and things like that
Especially since not EVERY city has an fully developed and dependable transportation system

 

[Trent Reznor]

True on both statements. I would try to buy a car in cash way before paying 29% interest rate. But we do offer a warranty and our cars are a lot nice then whats on CL.

I agree as well, but back then I HAD TO give you a loan if you met the criteria. HAD TO. Even if I didn't want to. If you fit the program, I had to at least send you an approval even if it was for $200 p/m and you were asking for $500.

 

[Trent Reznor]

And in the grand scheme of things, I've had ONE car payment in my life and it was for 2 whole months until someone wrecked that car on me. I've ALWAYS been a used car guy, but my dad is a car guy by hobby. He can ALWAYS find you a gem for what you have cash wise.

 

[king au]

Loans in Canada might be a little more harder to come by if people are getting approved after having two repos still in the u.s.

 

[heliumclinton]

So what credit score is considered subprime?

 

[stillin729]

the bottom line is bad credit is gonna bend you over when it's all said and done

no sense to pay back twice what the car sticker price was