Tips for Buying Cars With Less Than Perfect Credit

If you need tips for buying cars with less than perfect credit near Metairie or New Orleans, LA, you're not alone. There are many prospective car buyers out there who are looking for Toyota credit-challenged financing in the Slidell, Louisiana area.

When you're looking to apply for credit through Toyota financial, you should take the interest rate into account alongside the credit-challenged autos available to you.

How to Finance a New Truck

Financial health starts with you. Make sure that you have a clear understanding of the following; you'll do just fine:

• NADA Values
• Interest Rates
• Debt-to-income Ratios
• Loan Terms

It's All About the Value

No matter how you spin it, the value of your car when you buy it can either benefit you or hurt you. On dealership lots, people aren't haggling for their health; they're haggling for long-term financial wellness. If you buy or lease a car that is priced well-over its NADA value, then you'll have negative equity.

5 Reasons Negative Equity Is a No-No:

1. Your debt-to-income ratio will be damaged. Since the market value of the car is likely higher than it should be, your over loan will be larger. Your ratios will be higher, making it harder for other lenders to lend to you.
2. Paying off your vehicle will be difficult. Unless you come across a large sum or get a substantial pay increase, you'll be suffering through payments that are higher than they should be for the term of the loan. The longer the term is, the more interest you'll have.
3. It will be hard to sell back to a dealer or private buyer. If you want to trade-in your car later, people will only pay the NADA value, leaving you either stuck with the car or stuck with a net loss. While a normal car buyer might see a slight depreciation in value, someone who bought a car with less than perfect credit at a predatory loan rate will see a large difference.
4. Unreasonably high monthly payments. While you can expect slightly higher rates with lower scores, it's safe to say that the interest adds a lot of weight to your monthly payments. Shop around and make sure you're getting a reasonable rate for your score, especially with credit-challenged auto loans.
5. Refinancing is expensive. If you are the victim of a predatory loan rate and you attempt to refinance it, it will be costly. The new lender might offer a better rate and lower payments, but again, you'll have to cover the negative equity yourself. While it's possible to access an affordable car loan, you'll need to be aware that negative equity always gets paid. Ensure you get it right the first time by doing your homework.

What To Look For When Shopping In-House Financing

Rates are always changing, so be sure to do your research based on your credit score. There are plenty of free credit monitoring services that run soft inquiries, so you can get an idea of where you land.

Once you have an idea, look at reasonable rates for your score and don't settle. While you can expect a slightly higher rate and down payment for credit-challenged car loans, it should never be obscene. If it seems like it's not right, then it isn't.

Getting an Auto Loan With Less Than Perfect Credit

Make sure that when you are looking for used cars for sale in Slidell, LA, that the prices are reasonable. All you need to look up the NADA value is a VIN, year, make, model, and mileage.

Most online sites provide this information. If the dealer has priced the car way above NADA value, you should either be prepared to talk it down or don't shop there. We would recommend avoiding this all together by shopping with trustworthy Slidell dealerships like ours!

We always offer fair pricing because we know how treacherous the world of financing can be. We're not here to dig you into a deeper hole; we're here to help you out of it!

Can I buy a Used Car with Less Than Perfect Credit?

As long as you have a basic understanding of fair lending and vehicle values, you can buy a used car. Everyone deserves access to reliable transportation. If you have concerns or questions about credit-challenged autos, contact our finance department near New Orleans, LA.