If you have bad credit and hope to finance your next vehicle with a bad credit auto loan there is one type of financing that most legitimate bad credit lenders will not do.
We have the experience
Bad credit car loan web sites such as ours at www.autocreditexpress.com can help you if you’re serious about reestablishing your auto credit. By filling out the online car loans with bad credit loan application you can begin a new chapter in your life by getting approved at one of our affiliate dealers for auto loans with bad credit. Along with paying the rest of your obligations on time, you will then be able to raise your FICO scores as well as reestablish your car credit.
But the process can be even more expensive than it has to be – especially if you choose the wrong kind of loan or the wrong kind of vehicle. Choosing the wrong kind of loan from a Tote the Note, We Finance Everyone car dealer can be a problem because these dealers don’t report your payment history to the credit bureaus, while picking a vehicle that’s barely within your budget can lead to repossession.
One of the keys to successfully rebuilding your credit has to do with focusing on the basics. In this case, it means that before you fill out our bad credit auto loan application, you need to know how buying and leasing vehicles applies to credit-challenged consumers.
Auto Leasing basics
When you lease a vehicle, you pay for only that portion of the car that you actually use. If this seems confusing, here’s how it works: when a bank leases you a car, there are two components to your lease payment – the interest expense (known as the money factor) and the depreciation expense of the car.
For example, in a two year lease, the bank computes a 24 month residual value (the projected value of the vehicle at the end of the lease) and subtracts this value from the price you pay for the car. This is the depreciation expense. The bank then computes two years worth of interest.
These two amounts are then added together to get the total lease amount and then divided by 24 (the number of months) in order to get the monthly base payment. This base monthly payment is what your state bases its sales or use tax on and, once that is factored in, you have the total monthly lease payment for your car.
Because this monthly payment is usually lower than a retail payment (buy), it makes the car more affordable to own. But because you are paying only a percentage of the actual value of the car over the lease term and the buyer usually never has any real equity in the vehicle, lenders usually reserve leasing to only their best customers. Because of this, leasing is really not an option for buyers that have bad credit,.
Buying basics
Buying, usually called retail financing, is where the buyer finances the entire cost of the car less any down payment or trade equity. Most bad credit lenders require a 10% down payment or $1,000 down, whichever is less. This down payment not only reduces the amount financed, it gives you an equity stake in your vehicle as well – something that’s important to bad credit lenders.
If you go to the web site www.autocreditexpress.com, you’ll find a number of car loan calculators that will help you not only budget your loan, but give you an idea of how much your car payment might be.
The Bottom Line
Once you’ve had a chance to use the calculators as well as the rest of the information available in the Resource section of our web site, you should be able to understand why Auto Credit Express has helped so many people with bad, blemished, bruised and tarnished credit buy a car and reestablish their auto credit at the same time.
So why not begin the process right now by filling out our secure online bad credit car loan application to see what we can do for you.
