Less-than-perfect credit can be a major hindrance when trying to finance a car, but it doesn’t have to be. It’s necessary to find a lending company that welcomes borrowers whose credit isn’t the best. We’re proud to represent an unrivaled network of dealers and finance companies who are dedicated to financing people who have lots of different credit histories, even people who have:
- Damaged credit.
- Little to no credit.
- No down payment.
A vehicle finance specialist can help you:
- Compare APR’s.
- Choose your lender.
- Schedule a time to select your vehicle.
Go ahead and apply for your loan.
Orange Car Lots for Bad Credit
Given the surge in bad credit in California and across the country, more and more dealerships now have finance departments dedicated to subprime auto lending. As opposed to buy here pay here dealers, these dealers offer:
- Interest rates that are reasonable.
- Down payments that won’t leave you broke.
- Vehicles that are more dependable.
Your credit and income will dictate the cars you’re qualified to finance. Below is an example based on a monthly income of $2,777, the average in Orange:
|Credit Score||Income Factor||Amount Borrowed|
These are simply estimates. You may not be qualified to borrow this much, especially if you have a lot of existing debt.
Apply online to have a finance professional confirm how much car you can afford.
Trimming Your APR Rates
Getting a less expensive interest rate will pay big dividends.
Have a look at what you will pay in interest at an APR of 11.00% as opposed to 3.50%.
|Good Credit||Fair Credit||Subprime Credit|
|Rate||3.50% APR||7.00% APR||11.00% APR|
As you can see, your rate of interest is nothing short of paramount, and you’ll be glad to know that it can be lowered in a variety of ways.
- Credit Profile: Review your credit report and correct any mistakes you come across.
- Down Payment: A good down payment will help reduce your loan-to-value ratio–the amount of your loan as compared to the price of the vehicle you’re buying–thereby reducing your rate of interest.
- Debt to Income Ratio (DTI): Do you have a lot of existing debt? Reducing what you owe will lessen your DTI and improve your credit score, both of which should result in a lower interest rate.
- Loan Length: Longer loans come with lower payments, but shorter ones offer cheaper rates.
- Type of Vehicle: It doesn’t cost as much to finance a new or nearly new vehicle–as long as you don’t pay a higher purchase price.
Buy Here Pay Here Auto Loans in Orange, CA
Thinking about heading to a buy here pay here dealer for approval? Normally, there are more attractive options. A lot of dealer financing is indirect, as dealerships go through off-site banks and lenders to supply the loans. By contrast, BHPH dealers make credit decisions on the lot, often with no credit check.
Sadly, you will be faced with inflated interest rates, massive down payments, and vehicles that are too expensive for their mileage. As if that weren’t enough of an issue, these dealers almost never report back to the credit agencies, which means you could make all of your payments month after month without improving your credit score.
Financing Guidelines for Orange Borrowers
Your car payment, what should you spend? Determine what’s 10% of your monthly income–the maximum amount you should spend. If you’d rather not be under water on your vehicle, paying exorbitant finance fees, consider a loan of no longer than 60 months. This will buy you a car or truck that costs roughly 50% of what you get paid annually (pre-tax). For Orange residents, having incomes of $33,325 annually, this is a car which costs $16,662. Cars don’t appreciate like most homes do, so you’ll want to fork out no more than you have to, in order to obtain a car that fits your needs.