Here at Motive Auto Finance, we are aware of the complications that Alaska consumers struggle with when they’ve got bad credit. Here are the keys to our system:
- Sophisticated Credit Approval Platform
- Huge Network of Dealers
- Comprehensive Client Instruction
Alaska Car Lots for Bad Credit
Dealers known for sub-prime auto loans are sometimes referred to as bad credit dealerships. Compared to a buy here pay here car lot, such dealerships are able to offer more affordable rates and significantly better terms. The dealer will look at your credit and income to see the specific cars you’ll be able to finance. If you want to steer clear of loan default or repossession, consider a vehicle that won’t strain your budget, with a payment of about 10% of your income–any higher, and you’re sure to have issues. For people bringing in $3,664 per month, the average in Alaska, this equates to a payment of $366.
Apply online to speak with an auto finance professional about how much car you can afford.
Reducing Your Rates of Interest
Getting financed at the cheapest rate of interest you can is crucial. To illustrate, If you borrow $32,979 at 3.50% APR for Five years, you would find yourself paying $3,018 in total interest. At 7.00% APR, you’d pay $6,202, and at 11.00% APR, $10,044. There’s more: your payment would climb from $600 to $717.
Thankfully, there are several quick ways you can limit the amount you pay in interest.
- Credit Profile: Make certain that there aren’t any errors damaging your credit. If you see one, make certain you contest it.
- Down Payment: A substantial down payment will bring down your loan-to-value ratio–the size of your loan as compared to the price of your vehicle–thereby reducing your rate of interest.
- Debt to Income: Have you got a significant amount of other debt? Reducing what you owe will decrease your DTI and elevate your credit score, both of which should result in a reduced rate of interest.
- Loan Length: Longer loans are regarded as higher risk investments. All things considered, a shorter loan typically comes with a lower rate of interest.
- Type of Vehicle: Higher rates are charged for used vehicles than new vehicles, though they don’t cost nearly as much to begin with.
Buy Here Pay Here Car Lots in AK
Known as buy here pay here, tote the note, or your job is your credit car dealers, these businesses generally have a few fundamental features:
- They furnish car loans on-site.
- They do not pull your credit.
- They want you to pay them 2-4 times per month, often in person.
For people with really bad credit, Alaska buy here pay here car lots in many cases are the only real option, even though there are a couple of downsides:
- High Financing Fees
- Large Down Payments
- High Risk of Repossession
Recommendations for Financing
Divide your monthly income, prior to withholdings, by 10. Make sure you spend no more than this on your car payment each month. At the same time, in order to decrease finance fees and negative equity, choose a 5-year repayment term at most. With this payment and finance term, you will be buying a car or truck which costs roughly half of what you make per year. For Alaska residents with incomes of $43,972 per year, this is $21,986. In most cases, the less you can spend while still getting a trustworthy car, the better.