Shopping for a new or used vehicle? If you are like the majority of Americans, there is a good chance you are going to need a car loan to get yourself in the driver’s seat of the car you want. We do business with a vast network of dealers and lenders, and we have one of the best rates of approval in the business. It really is hard to find an easier way to buy your next car.
Bad Credit Car Dealerships in Fayetteville, Arkansas
If you are looking for an auto dealer that accepts bad credit, welcome to Motive Auto Finance: we can help get approved for the loan you need. Compared to a BHPH car lot, such dealerships can offer:
- Cheaper APR rates.
- Less significant down payments.
- Less chance of falling prey to underhanded lending.
- Opportunity to re-establish your credit.
You may not be eligible to finance the higher-priced cars in the showroom. Here is an example based on an income of $2,453 per month, the average in Fayetteville:
- Exceptional Credit: $24,530 (Income x 10)
- Fair Credit: $22,077 (Income x 9)
- Mediocre Credit: $19,624 (Income x 8)
- Damaged Credit: $17,171 (Income x 7)
- Very Poor Credit: $14,718 (Income x 6)
These are just approximations. You may not get to finance this much, particularly if you’ve got a high debt-to-income (DTI) ratio. Submit your application to have a finance professional confirm how much car you can afford.
Fayetteville Auto Loan Rates: How to Reduce Them
Tons of people focus on paying the cheapest price they can for the vehicle they’re buying, but for people with bad credit, interest rate is equally as importantto cutting costs in the long run. Consider this: On a $22,077 loan financed at 3.50% APR for 60 months, you’d pay $2,020 in total interest. At a rate of 7.00% APR, you’d pay $4,152, and at 11.00%, an astonishing $6,723. Furthermore, your payment would rise from $402 to $480.
A stronger credit score will lead to lower rates of interest. At annualcreditreport.com, you can check your report once per year, at no cost, and challenge any mistakes you find, potentially boosting your credit score. Also, taking care of any outstanding debt can bring down your debt-to-income ratio (DTI), thereby reducing your rate of interest. You can finance a car at a lower rate for 36-48 months than for 60 months or more, and you’re less likely to wind up upside down on a short-term loan. As a final point, how much can you put down on your vehicle? Down payments reduce your loan-to-value ratio, and consequently your interest rate.
Buy Here Pay Here Dealers in Fayetteville, Arkansas
Buy here pay here dealerships hopes you believe that you can’t get approved anyplace else. However, this usually isn’t the case. Most dealer financing is sourced elsewhere, as dealerships work with banks or credit unions to deliver the loans. In contrast, BHPH dealers handle everything on site. They behave as both lender and dealer. Hence the phrase buy here pay here. Downsides include:
- Ridiculous APR Rates
- Exorbitant Down Payments
- Overpriced Vehicles
- Aggressive Repossession Tactics
Worse, these car lots very rarely work with the credit agencies, so you could make every single payment when they’re due without making improvements to your FICO score.
Financing Guidelines for Fayetteville Borrowers
If your financial fitness is important to you, you should spend no more than 10% of your monthly income on financing a car. In order to prevent equity issues and excessively high finance fees, agree to a repayment term of 60 months or less. This equals a vehicle that costs about 50% of your annual income. For Fayetteville residents, having incomes of $29,430 annually, the city average, this is $14,718. Cars don’t maintain their value like most homes do, so you want to fork out no more than you have to, in order to buy a car that won’t leave you on the side of the road.