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A Co-Signer Can Do More Than Boost Your Credit

If you have bad credit, chances are you’ve looked into getting a co-signer to help boost that score of yours. But, did you know that a co-signer actually does more than just boost your credit score? While the primary reason to get a co-signer is obviously to ensure that you get a loan, even if it’s a bad credit car loan, a co-signer can also help you meet the income level required to get that loan, and provide a source of guaranteed income. This works just like boosting your credit score does. The co-signer’s information will be taken into account and merged with your information. Combined, it will be enough to get a car loan. We at Columbus Auto Mall are committed to helping you get into a reliable, affordable vehicle in Columbus Ohio.

Let’s look at each one of these in greater detail…

The Obvious: Credit Score

The most obvious way a co-singer helps out is by boosting your credit score. How is this done? Since your credit score is too low to get a (bad credit) car loan, a co-signer with a better score will be needed to help you sign those papers. Their credit score be added to your credit score, effectively boosting it enough to get you that car loan you need.

Here’s the thing though – if you get a co-signer to help out, he or she will also be financially responsible for the loan. Meaning if you decide to default on it, that unlucky co-signer will have to pick up the slack and pay off the rest of the loan.

Boosting your Income

There are other requirements when it comes to getting a bad credit car loan. One of the requirements subprime lenders look at is your income situation. Thankfully, a co-singer can help out with this as well.

No, a co-signer isn’t going to give you money or open up a direct line to his or her bank account for you. Instead, when your co-signer signs on with you, he or she will then be able to add his or her income to your own. The lender will then use both incomes in order to qualify you.

Keep in mind though, this only works if you’re married. In other words, the only person who would be able to help with this is your spouse.

Guaranteed Payment

Since you have bad credit, the subprime lender has to assume risk when it comes to helping you out with financing. Therefore, your co-signer needs to be sure that your loan will be repaid one way or another.

More importantly, lenders need to calculate your DTI (debt to income) and PTI (payment to income) ratios on the loan, and approve you for it. If the loan looks like it will take up too much of your income and pose a problem — or you can’t afford it — then the lender won’t approve you.

Therefore, a co-signer provides that guaranteed payment the lender is looking for. If you aren’t financially able handle the loan anymore (or default on it) then the co-signer will end up paying off the rest.

But, you shouldn’t have to worry about that if you are responsible and plan accordingly. A co-signer really is a great way to help boost your credit, along with the other factors that play into securing a car loan.
Let us here Columbus Auto Mall Help you get into your dream vehicle.

 by Roger Rapoza on December 20, 2016 Autoinfluence

Five Buy Here, Pay Here Dealership Shopping Tips

Buy here, pay here dealerships can be intimidating. High-interest rates, due to bad credit, a selection of only used cars, and a whole new way of buying a car might put you off from the experience entirely. But, it doesn’t have to be that way. If you follow these five tips, not only will it make getting a car from a buy here, pay here dealership easier, it will also make it less stressful. We here at Columbus Auto Mall do our very best to make car buying as stress free as possible

Which is what everyone — dealerships and consumers — both want for a car-buying experience. After all, the less stressed you are, the easier it makes their job. The easier their job, the more efficient they can be. It all comes full circle in the end.

Learn the Car’s Origin

I’m not saying all buy here, pay here dealerships are untrustworthy. Nor am I saying all of them are trustworthy. But just like any used car purchase, you’ll want to learn the origin of the car before purchasing it. The shopping process might be done differently, but there is nothing against looking at a CarFax report to learn about any mechanical trouble the car has experienced, or accidents it might have encountered.

Therefore, you’ll want to make sure you check that out. If the dealership refuses to show you a vehicle history or CarFax report, then walk away and look for one that will.

Get it Inspected Independently

Same goes for an independent mechanic inspecting your prospective purchase – if the dealership won’t let you test drive the vehicle so you can see firsthand that the vehicle is in good condition, then don’t buy it. Chances are, the dealership is trying to hide something.

Hey, it’s not just buy here, pay here dealerships that would do this. There are plenty of unscrupulous used car lots out there as well.

Short Term Financing is Key

Although it will be hard to negotiate terms because of your poor credit, still shoot for short term financing. That doesn’t mean a smaller amount with increased frequency of payments — you’ll already be paying bi-weekly, most likely — but I mean short-term financing of a relative low bi-weekly payment over the course of 32 months instead of 64. That way, you keep the interest rate down and save yourself some money.

Pay A Larger Downpayment in Cash

One of the best ways to reduce your payments? Simple! Pay a larger down payment in cash first. Just like “standard” car buying, the more you pay upfront, the more you reduce the overall loan term. Aim for at least 20%, and if the BHPH dealer requests more than that, consider it a good thing. Just make sure to negotiate short term financing if you are paying more than average on a down payment. This way, you’ll know for a fact the down payment actually put a dent in the overall price of the car.

Get What You Need – Not Want

Finally, get what you need — not what you want. If your budget is $14,000 and you find a used car that works for $7,000, then buy that one. Don’t get one that’s more expensive simply because it has heated seats or leather upholstery. Take that chunk of change you saved and put a big down payment on the cheaper car, and put the rest in the bank to help with repairs or get a jump start on paying off your loan.

Eventually, your credit score will go up if you’re good with making the bi-weekly payments in cash (which is how most BHPH dealers take payments). Then, you can refinance the loan, pay that car off quicker, and upgrade to a new one. To help you we at Columbus Auto Mall also offer conventional auto financing. We are committed to helping you achieve mobility as well financial independence. Stop and see on 2900 South High Street, Columbus Ohio.

 by Roger Rapoza on January 25, 2017  Autoinfluence

Buy Here Pay Here 101

It is difficult to feel like you have the means to pay for that car or truck you want. Financing is always a struggle since it depends on your existing and previous financial history. Unless you can pay for the car with a cash buy, you will need to check out the different options like automotive loans and leasing. This can be a challenge if you do not have the best history. Bad credit is a common limit many people struggle with when buying a new car. If your own credit score is low, you may feel like you cannot find the right loan to afford the dream car. Thankfully, this is not the case. In fact, working with a dealership like Columbus Auto Mall can be easy when it comes to automotive financing. With our Buy Here, Pay Here program, you can find the right car, apply for financing, and secure your loan in one location. All it takes is some paperwork, a credit check, and some friendly help along the way.

What You Need to Know About Buy Here Pay Here
Better known as In-House lending, Buy Here, Pay Here (BHPH) means that a dealership has a specific private bank that they work with to provide financing to vehicle loans. If you do not have good credit and need to purchase a car quickly, your best option may be to go to a BHPH dealership. But before you purchase with a BHPH deal, you should take a little time to do some research and find out what you can about Buy Here, Pay Here financing.

What Exactly is Buy Here, Pay Here Financing?
Buy Here, Pay Here financing here in Dayton, Ohio is a system wherein you can arrange your car loan at the car dealership where you bought your car and make payments on it there as well. In simpler terms, BHPH is a simple one-stop vehicle shopping process because the car dealership you buy your car from is also the finance company.
Approval for a car loan is almost always approved when you go for BHPH financing as loan decisions are made by the dealer, who wants to sell you a vehicle. You have very good chances of getting approval if you have an address and are employed with a steady income. However, you should bear in mind that the dealer is not granting you a loan out of the goodness of their heart – the fact is that they are likely to make as much, or more, profit on the financing they provide you with as they do on the car itself. Because you are a high-risk borrower, you will no doubt get a double-digit interest rate.
When you buy a vehicle from a BHPH dealer, you will find it helpful to find one that is close to your home or place of employment. This is because you might need to make weekly or biweekly payments in person to the dealer. While there are dealers who accept payment by mail or phone or online payments, Buy Here, Pay Here financing usually means physically bringing your payment to the dealership.

Differences Between Traditional and BHPH Dealerships
In recent years, the lines that separate a BHPH dealership and a more traditional one have become blurred. Quite a few traditional dealerships – for new and used vehicles – now offer car buyers Buy Here, Pay Here financing as an option. While you might not see “Buy Here, Pay Here” splashed around the dealership, you will likely find phrases like “We Finance,” which is usually code for BHPH. If you have difficulty getting traditional financing, it is a good idea to start with a franchised dealership’s used-car lot that advertises rebuilding credit or easy financing.
The bad news is that Buy Here, Pay Here financing turns the experience of shopping for a vehicle upside down. Instead of the normal process of deciding on a car and then discussing financing, a BHPH dealer will first qualify you before they determine how much they are willing to lend. Finally, they will show you the vehicles available as options, and you will probably have limited choices.
When you opt for BHPH financing, you should make sure to inquire about any late payment policy the dealership may have in place. Do they give you a grace period? If yes how long is the grace period? Also, you should always ensure that the contract clearly lists out how much time you have between missing one of the weekly or biweekly payments and having your car repossessed.

You Get Shorter Loan Terms
One of the benefits of going to a BHPH dealership is that they usually offer shorter loan terms. Why not take advantage when you are offered a short-term loan when purchasing a vehicle? As mentioned earlier, BHPH financing typically has a higher interest rate than long-term loans, and the weekly, biweekly or monthly payments that you make can be a little higher as well. However, you will save a lot of money in interest, and that definitely makes up for it. Additionally, you will own your vehicle a lot faster – in most cases, 3 to 4 years vs. 6 to 10 years – and this will help you in building your credit faster and also building equity in your vehicle faster.

Vehicle Protection Plans or Warranties
Even if you can get a sizeable loan for buying a vehicle, it is important to make sure that you carefully consider how much you actually want to spend on it. You also need to consider the upfront price as well as the fuel, insurance and maintenance costs that you will be paying for many years in the future. Fortunately, there are a number of Buy Here, Pay Here dealerships that offer vehicle protection plans or warranties, which provide the benefit of helping you reduce any unexpected out-of-pocket expenses for repair work with a deductible that is simple and inexpensive.

Benefits of Buy Here, Pay Here Financing
Some of the benefits of opting to buy a vehicle from a Buy Here, Pay Here dealership include: they provide credit-challenged borrowers an option to buy a vehicle when traditional lenders will not. When you make payments on time, it can help in repairing your credit history. However, you need to make sure that the dealership reports payment histories to the credit bureau. Because BHPH dealerships buy older cars, they will be more willing to take in your old vehicle toward the down payment on a new car that you want to purchase.
When you cannot get auto financing from a traditional lender, you have the option of going to a Buy Here, Pay Here dealership to get the car that you want. While the car options you have may be limited than with a traditional dealer, you can still buy a good car and get a great deal for financing your vehicle purchase. However, you should keep in mind that you may have better credit than you think. This is why you should go to traditional lenders, like banks, finance companies, and credit unions, before deciding on other options. When you have been denied by every one of them, it is only then that you should revert to Buy Here, Pay Here financing. 

Get The Car You Need Even With Bad Credit

Buying a car can be stressful, but if you are currently dealing with bad credit, the car buying process can seem more than stressful, it can seem downright impossible. Luckily, there are car dealerships that can help drivers with poor credit secure bad credit car loans. If you are in need of a car and need help securing a loan for your purchase, finding a quality dealership to help you secure a bad credit car loan can be just the ticket to get you driving the vehicle you need today. Here are a few things to look for when buying a car with bad credit.

Know Your Credit Situation
So how bad is your credit anyway? Knowing your actual credit situation is critical to getting the best and most fair deal when you are looking to secure bad credit car loans. You’ll want to use a credit score company or service that checks and calculates all three of the major credit bureaus when they are calculating your credit score. This will give you the best idea of what banks, dealerships, and credit unions will be looking at when they consider giving you an offer on a car loan.

Another thing to remember when you are trying to secure bad credit car loans is that the actual score will affect things like your monthly payment, how much money you need to put down, and the terms and conditions of your loan. As you can see, there is more to it than simply “bad credit.” Within this term there are many variables that can greatly change what actually happens with your car loan. So, when it’s time to secure financing for your new or new-to-you vehicle, make sure you know as much about your credit situation and personal finances as possible. For a quick and easy reference, here are a few things you’ll want to have answered for yourself before heading to a dealership:

  • What is your credit score?
  • What kind of negative marks will appear on your credit report?
  • What are you able to afford for a monthly car payment?
  • What about car insurance?
  • Are you going to trade-in a vehicle?
  • How much, if any, can you offer as a down payment?
Consider a Cosigner
Many people skip over the idea of getting a cosigner for a car loan. Not only can a co-signer with good credit help you to secure a car loan if you have bad credit, a cosigner with excellent credit can also get you lower monthly payments on the loan you choose or that is available to you in your current credit situation. A co-signer plays a double value role in this bad credit car loan process so it may be beneficial to consider this method with someone who would be comfortable cosigning a car loan for you. This can be an excellent way to secure a lower rate, making paying off your vehicle quicker and easier.

Do A Lot of Research
When you start considering a bad credit car loan you will encounter many dealerships and loan companies who will offer all kinds of promises and offers to try and get you to secure a loan with them. Some of these will be legit and some will not. Be sure to shop around, read the fine print, and make an informed decision before you sign any papers for your car loan.

Check Out The Competition
Don’t just jump at the first car loan that you see where you can get approval. You’ll want to shop around and look at different available loan terms, loan conditions, down-payment options and requirements, length of loan, and more. Shop around to several dealers or loan companies that offer bad credit car loans.
Choose a Reputable Dealer
Once you make up your mind on who you want to buy a used car from and to handle your bad credit car loan, you should check that the dealership you are working with is going to give you all the information you need about the loan you are applying for. Make sure you know all of the terms of the loan and double check that these terms are not only workable with your budget and lifestyle, by that the terms are final. One thing you do not want is to get yourself in a position with variable loan terms that can end up putting you in a position down the road where you become unable to pay and suffer additional consequences such as car repossession and a worse credit score than when you started.
Think About Future Credit
When you secure a bad credit car loan you will most likely be getting a loan with a higher interest rate. In the future you will want to get a better rate. How can drivers get better interest rates on their future car purchases, or when they refinance their original purchase? They can get better interest rates with a better credit score. And one of the greatest advantages of getting a bad credit car loan, aside from the fact that it gets you driving a vehicle that you need, it can also help improve your credit score. How? Loans that report regular on-time payments on a car loan to the three major credit bureaus can help raise your credit score, therefore giving you the opportunity to get a better deal the next time you finance.

Consider Buy Here, Pay Here Car Loans
Buy here pay here loans are a special type of financing for car loans that offer drivers with bad credit the opportunity to secure a car loan and drive a vehicle. These buy here pay here loans are loans that are offered directly through the dealership, rather than through a bank or credit union. The biggest drawback of a buy here pay here loan is the interest rate. Interest rates on buy here pay here car loans can go all the way up to 20%. However, this is sometimes the only option available to drivers with bad credit who really need a vehicle. Of course, as drivers go along, they can pay regularly and on-time and as long as the dealership they are working with reports to the three major credit bureaus, they will have the benefit of their credit score improving. Once their credit score is improved, they can refinance their car in a more traditional way to get a better interest rate, or they can trade their vehicle in and simply make a new purchase at a better interest rate. Either way, Buy here pay here loans can be a viable option for drivers who need to secure a bad credit car loan.
Owning a Car with Bad Credit is Possible
For many drivers who are suffering from the consequences of having bad credit, buying a car can seem out of reach. Thankfully, there are now several options for drivers who need to secure a bad credit car loan. Start researching today, and you will find that there are options for you if you suffer from bad credit. Find a bad credit car loan that suits your terms and you will find yourself driving that vehicle you need and improving your credit sooner than you think.

 by Josh Billings on October 19, 2018  Autoinfluence