How to Buy a Car with Less than Perfect Credit in Lexington
Over the last decade, the American economy has hit many people hard and Lexington is no exception. If you are searching for a bad credit car loan, do not feel like you’re alone. Many people are looking for poor credit auto loans in Lexington. Freedom CDJR of Lexington excels in working with those in search of a bad credit car loan, often called a subprime auto loan. One of our best resources is
our pre-approved credit form. Fill it out and get approved now!
At Freedom CDJR of Lexington, we realize that bad credit is often situational and each individual’s situation is different and needs to be handled as such. For example, there is a difference between a poor credit auto loan, a no credit auto loan, and a recent bankruptcy auto loan. You may have more hoops to jump through, but don’t worry, it is NOT impossible!
Freedom CDJR of Lexington has fantastic relationships with a variety of subprime bad credit lenders. Poor credit auto financing can be grouped into several categories: Poor Credit Auto Financing (also known as bad credit car loans or subprime auto financing), Second Chance Car Loans, No Credit Auto Loans, Bankruptcy Auto Loans. Here are some guidelines and resources for purchasing a vehicle with bad credit in the Lexington market.
Poor Credit Auto Financing
This category is often one that can be viewed by lenders more favorably than others. People in this category are looking for an auto loan with a subpar credit score. Frequently, it is easy to determine why the individual’s credit score is poor. It can be tied to a life-altering event like a serious illness or injury, loss of employment, or a divorce. Lenders tend to be more forgiving of these issues if your credit score was good or fair prior to the life altering event. Freedom CDJR of Lexington will work with you to find a lender who understands financial hardships and credit adversity.
Second Chance Auto Loans
This category is exactly what it sounds like, a second chance at car ownership after a bad credit situation. Second chance auto loans are at a higher interest rate than standard auto loans, but they afford people the chance to secure reliable transportation. This can often be the difference between improving your financial situation or making it worse as many people need stable transportation to get to and from work. Freedom CDJR of Lexington works with a variety of second chance auto loan lenders in Lexington.
No Credit Auto Loans
No credit auto loans are really different than bad credit auto loans. People in this category lack any established credit or have little established credit. Here are a couple of easy tips if you think a no credit car loan is for you:
- Have a cosigner in mind. A cosigner is someone who has established good credit that signs on your loan and “vouches” for your ability to pay it back.
- Begin to establish your own credit by applying for a credit card, using it every month, and also paying it off every month. This can establish credit quickly.
- Set up a checking and savings account with a bank
- Keep your living and employment situation consistent
Bankruptcy Auto Loan
Bankruptcy auto loans are similar to bad credit car loans, but depend on the type of bankruptcy, how and when it was executed. If you apply for a loan after a Chapter 7 bankruptcy, the court often appoints a trustee to determine whether or not you will be approved for the loan. Chapter 7 bankruptcy stays on your credit report for 10 years. In a Chapter 13 bankruptcy, the court also appoints a trustee, but approval for a new line of credit is likely if the person filing for bankruptcy applies within 12 to 24 months of filing.
Freedom CDJR of Lexington in Lexington has extensive experience with bankruptcy auto loans. We have several lenders who specialize in this type of loan.
Tips for Bad Credit Car Loans
There are several tips for bad credit car loans that can help you have a better chance of getting financed!
- Cash Down Payment -Freedom CDJR of Lexington understands that cash may be tight or you may have negative equity on your trade-in, where you owe more on your trade than the vehicle is actually worth, but if you are able to put cash down, it is HIGHLY recommended. Putting cash down as a down payment will lower the amount you finance and this lower your overall monthly payment on a loan. A down payment also reassures the lender that you’re serious about your purchase and less likely to default. Also, you may be offered a lower interest rate for offering a down payment which could save you thousands in interest over the life of your loan and once again lower your monthly payment!
- Figure Out What You Can Afford on A Monthly Basis – When financing a vehicle with bad credit, it is imperative to ensure you can afford the monthly payment. There are a variety of payment calculators available that can help you figure out what you can afford. Make sure the monthly payment is something you can afford even if the “oh no” moments come up, those unexpected expenses that are not in your monthly budget. When financing a car with bad credit, the first goal should be 12 consecutive months of on-time payments. Often after a year of successful payments, you become eligible to refinance your bad credit auto loan and can earn a lower interest rate. A Freedom CDJR of Lexington representative will work tirelessly to find a vehicle that fits your lifestyle and your budget.
- Choose a Vehicle Based on Needs and not Wants – Often times purchasing a car becomes an emotional decision, an aspirational goal. You know….that sports car or tricked out truck that you have always wanted. But when purchasing a vehicle with bad credit, it is important to choose a vehicle based on what you need and not what you want. You want to choose a vehicle that fits your family’s needs, that will save money, is practical, and will avoid issues making payments down the road! There will be time for that extra fancy lift kit or 400 horsepower engine in the future! Search our inventory of new vehicles!
Freedom CDJR of Lexington specializes in bad credit auto loans, poor credit vehicle loans, no credit car loans, and subprime auto financing in the Lexington, Nicholasville, Richmond, and Frankfort areas. From our knowledgeable sales staff to our managers in the finance department, everyone at Freedom CDJR of Lexington will work to get your bad credit car loan approved.
