Buying a car with bad credit in 2020 can be rather easy when you are well prepared. In this blog I want to show you exactly what to do, bring with you to the dealership to have a informed and well-prepared car buying experience.
Get Your Financial Documents in Order
TIPS TO GET YOU APPROVED FAST AND HASSLE FREE when you have challenged credit.
* Money down or trade equity is key. The more you have the better terms and conditions you’ll get. (% rate, the term of the loan, actual car the bank will approve, lower payment, etc) 10% is a good number, 20% is a better number.
* Bring with you your Most recent pay stub of 2020 showing income and taxes, your last pay stub of 2019 showing income/taxes.
* 2 utility bills showing proof of where you live,
* 6 names, addresses, phone numbers of different household family members or friends,
* proof of full coverage insurance (must be dated correctly)
* 1099/self-employed employees your need the last 3 months of bank statements and possible 2 years of tax returns,
* If your income is a government source (social security, court-ordered child support, etc.) you will need 3 months of bank statements showing direct deposited, and an award letter from the agency of income.
When you show up to the dealership with all the above-referenced info the transaction will go SMOOTH and in a TIMELY manner.
Remember, Buying a Car Doesn’t Have to Suck™
Watch out for scams.
People with bad credit are the target of countless scams. Don’t fall victim to predatory loans, no matter how much you want to be in a new car. Too often these loans end up poorly for the car buyer and result in yet another blemish on an already tarnished credit record. No matter how desperate you are for a new vehicle, take your time, get all the facts, and make the most financially sound decision you can.
Don’t buy with the expectation of trading for a new vehicle in a couple of years.
One of the ways car salesmen get you into a car is to build up your hopes of trading in next year. Sounds like a great deal, but when you do this, the balance of the old loan is added to the new loan and your payments increase or your repayment period extends. Don’t trade unless you improve your credit and can qualify to refinance at a lower interest rate.
Stay away from dealerships that don’t post the price of their car online.
One of the biggest car lot scams out there is making you give info to get the price of the car. Many times is name, email address, and cell number. Once you give that info you find out their are no prices to be found.
YOYO loan scams
A yoyo goes down and with a flick of the wrist comes right back to you. Well that is what a yoyo loan is. A dealership tells you that you are approved, have you sign paperwork, give you the keys to your car and send you on your way. WELL, that is until they call you and say “there is a problem with your paperwork”.
This is actually illegal in many cases and you have rights. This video explains more.
