Buying a car with credit amnesty — also known as bad credit forgiveness — can be more difficult if you need to finance a vehicle. Fortunately, there are dealerships that work with lenders that offer bad credit auto loans, and we can help connect you to the one near you. Before you do this, you need to make sure you qualify for a bad credit auto loan and know the type of lender you should be working with.
Work with the right lender
When you have bad credit, you can’t just walk into any dealership and expect to be financed. Instead, you have to work with a special financing broker which offers financing for bad credit. There are two types of dealerships that typically offer credit forgiveness programs:
- Special Finance Dealers – These dealerships work with subprime lenders who know how to handle various bad credit situations. Subprime lenders check your credit, but they also look at other factors, such as income and residency. When you finance through a subprime lender, you have the opportunity to improve your credit because they report loans and payments on time to the credit bureaus.
- Buy here pay here dealers – Sometimes called tote the note dealers, buy here pay here dealers are also lenders. It’s a one-stop shop, where you can buy a vehicle and finance it in one place. Unless otherwise stated, they do not do credit checks and use your income and a deposit to approve you. While it’s relatively easy to get approved for financing through one of these dealerships, you can’t improve your credit over time unless they flag your loan and payments in in a timely manner to the credit bureaus, and not all of them do.
Bad Credit Car Loan Requirements
Checking out the two types of lenders you might work with, let’s look at the specific requirements they typically ask for.
Requirements for subprime lenders:
- Proof of income – Income requirement varies by lender, but most subprime lenders require you to earn a minimum of $1,500 to $2,000 per month before taxes from a single source. Bring a recent computer-generated pay stub that shows your year-to-date earnings, or recent tax returns and bank statements if you are self-employed.
- Proof of address – Bring a recent utility bill in your name to the address on the application to prove you live where you say you live.
- Evidence of a working phone – Bring a recent phone bill in your name sent to the address on the application. This can be a landline or contract cell phone, but prepaid phones are generally not accepted.
- Deposit – The minimum down payment requirement varies, but most subprime lenders charge $1,000 or 10% of the car’s selling price, whichever is lower.
Requirements for Buy Here Pay Here Dealers:
- Proof of income – Just like subprime lenders, the amount of minimum income required varies and you must bring the same type of documents to prove your income.
- Deposit – Down payment is extremely important to buy here, pay dealers here, and is often higher than with subprime lenders. These dealerships usually base the down payment requirement on the cost of the vehicle, so it really depends on the car you choose.
Connect to a Dealer Today
Now that you have an idea of the types of dealerships that offer credit forgiveness and what they are looking for, are you ready to take the next step? If that is the case, Auto Express Credit is here to put you in touch with a local dealer who can help you.
We’ve been doing it for over 20 years, and we want to help you get started on your auto finance journey. To get the ball rolling, all you have to do is fill out our free and easy form car loan application formand we’ll get to work right away to find you a dealer in your area.