An auto loan is a great tool for improving credit. But, people with bad credit often pass on the option of getting a loan, thinking that buying from a private seller is a better choice. Though this can work out, it’s not the best choice for a buyer with credit challenges.
Buying Privately
Purchasing from a private seller can be decent choice if a buyer finds a reliable vehicle for a low price and has the money to spend. However, there are no options for warranties or guarantees if something happens to the vehicle after driving away. Because direct financing is difficult to come by for borrowers with bad credit, there are few chances of getting any type of loan to help finance a vehicle from a private seller.
Buying from a private seller also won’t improve credit. Without a loan, there are no payments to report to the national credit bureaus. All a bad credit car buyer gets with a private sale is a used car.
Special Finance Dealers
On the other hand, when a buyer with poor credit chooses to apply for an auto loan, there’s more to gain than just a vehicle. With bad credit, opportunities for financing typically only come from special finance dealers that have subprime lenders. These lenders look beyond credit scores to approve borrowers using requirements based on income, employment, and residence stability for loans that could improve credit through on-time payments.
There are other perks to purchasing from a dealer as well, like factory-backed or aftermarket warranty coverage that can help cover repair costs, the opportunity to buy a new vehicle in some cases or a late model used car in others, and possibly the chance to refinance for a better rate and term after some time has passed.
A Helping Hand
Once the decision to go for auto financing has been made, it can be hard to know where to look for a lender that works with damaged credit. Fortunately, we can help with that here at CarsDirect. We work with special finance dealers all across the country that have subprime lenders available to work with people who have bad credit, no credit, or even bankruptcy. Getting started is a snap, just fill out our auto loan request form, and we’ll begin the process of matching you with a local dealer. There’s no cost or obligation, so what are you waiting for? Get started now!
