Bad Credit Car Loans in Washington

The site has been up a few years now, and we seem to be doing quite well in terms of search engine rankings and traffic. We have been so successful at attracting users on the Internet that we receive several applications a day from outside of the State of Washington. That is fine, we still accept the applications. However, if you apply from outside of our area, the application is automatically routed to our affiliate network. We are usually able to help our users find a dealer to help them get an auto loan in their local region.

The only other reasons that you would be submitted to our affiliate network are under the following conditions:

1. You ask to be considered for the affiliate network. Whether because of distance, or some other reason.

2. You decide you do not want to work with our Olympia office. Maybe you do not like us, maybe you do not like the vehicles you qualify for.

3. You do not respond to the Olympia office contact attempts…either by phone or email.

4. We cannot help you. Although rare, sometimes we find a situation that one of out affiliate dealers will be able to assist you better than we can. If we do not see a way to go, sometimes another set of eyes looking at your situation can help.

We are not perfect, and do not claim to be. We are very effective at helping people with bad credit buy a vehicle. Most people who talk to us decide to get help from us. If you have a need for a car, and credit problems, give us the chance to help.

Get an Auto Loan with Bad Credit at WashingtonAutoCredit.com

I just got back from a Special Finance conference. After going to several different seminars, I found out that Buy-Here-Pay-Here (BHPH) dealerships seem to be doing better than most other dealers right now. The reasons are that with a bad economy, more people have bad credit and do not qualify for normal financing, and that more and more companies are using Starter-Interrupt devices with GPS.

Customers that are required to have a starter-interrupt device on the vehicle have a 5% +/- delinquency rate, while even people with decent credit have been recently showing delinquency rates of 20-35%.

How does it work?

Starter-Interrupt devices require that the customer make timely payments, otherwise the vehicle’s started is disabled and the vehicle will no longer start. The GPS portion of the device tells the tow truck company exactly where the car is.

With results that good, how long will it be before good credit lenders start requiring starter-interrupt devices on car loans?

Good and perfect credit banks will probably never require the devices. It would make the buyers choose other lenders. However, I believe lenders may start giving the customer a discount on the interest rate should they decide to have the starter-interrupt/payment reminder system installed. It might not be a bad thing given the number of repossessions that lenders are seeing right now.

If you are having a tough time getting approved for an auto loan, there is probably a company in your area installing the starter-interrupt devices on their vehicles and those devices can make it easier to get approved for an auto loan. For some, it may be their only option.

When you finance a vehicle you have certain rights, but so does the financial institution who gave you the loan. When you stop making your monthly payments, the financial institution may start the repossession process.

When this happens, a repossession company can come collect your vehicle from your property or wherever the car is parked. They are not required to obtain your permission, nor do they need your keys. If your car is repossessed, there is very little you can do to get it back, so make sure it doesn’t happen in the first place.

As soon as you know that you’re going to be late on a car payment, CALL THE BANK! Explain the situation and give them a definite date by which you can pay the bill.  Ask if they will allow you that time to pay without repossession. They may grant your request, or they may tell you there’s nothing you can do.

It is also a good idea to go back and read your contract as well as the laws regarding repossession in your state. Laws vary depending on where you live, and some states have strict rules about when and how a bank can repossess a vehicle. For example, if you can prove a financial hardship and the necessity of your car, you may have some leeway as far as making late payments.

If you are unable to avoid repossession and the vehicle is taken, you still have some rights.  First, you have the right to collect whatever personal property might have been in the car - CDs, after-market equipment, clothes, maps, etc. Call the lot to which your vehicle has been towed and make arrangements to pick up your things.

Remember that banks hate repossession. They have to auction the vehicle to recoup the money they lost in the transaction with you, and they would almost always rather make a deal to let you keep the car in exchange for a payment arrangement. Find out what they are willing to offer, or try to negotiate a deal for yourself. For example, you could offer to pay a smaller payment each month and extend the length of the loan.

The best plan is to be sure you never miss a payment.  If there is nothing you can do to avoid missed payments, be sure to be proactive about calling the bank ahead of time.

The Case for the Extended Warranty

While many manufacturers are offering longer warranty coverage on their vehicles, the debate about buying an extended service contract when purchasing a used car has resurfaced.

At Washington Auto Credit we suggest using common sense when buying a car.  We help people find vehicles that will fit their budget rather than trying to make your budget fit a vehicle that is just too expensive.  The purpose of one of these loans is to re-establish your credit, and we are dedicated to helping you reach that goal.  During the buying process, you’ll have the opportunity to consider a few dealer “add-ons”. These extras can range from window etching and undercoating to paint protection and extended service contracts.  While many of these items may not provide a huge benefit, you might want to take a closer look at the service contract – also called an extended warranty.

Why Should I Get an Extended Warranty?

When you take out a high risk loan, you are paying more in interest, than you would if you had perfect credit. For that reason, a bad credit loan payment will usually tie up more of your monthly budget. This doesn’t leave much wiggle room for unexpected expenses. The idea behind an estended warranty is the same as insurance – to spread out the risk into affordable monthly payments instead of one large, catastrophic one. It’s much easier to budget for a small monthly expense than for the unexpected hardship of a major breakdown.

The Bottom Line

If you are about to buy a car with a bad credit car loan, it is important to consider a used car warranty. Ideally, opt for the maximum term available, up to the length of your finance contract.

As far as applying for a car loan, for years, Washington Auto Credit has been helping people with credit problems get approved for new and used car loans. We work with the leading subprime lenders to get you approved. Once you’re approved, you are on your way to rebuilding your credit score and a brighter financial future.

Sometimes customers ask us if they need a driver’s license to buy a car through one of our car dealerships. Often it is better to answer a question with a question. If you do not have a driver’s license, what are you doing trying to buy a car? Or perhaps, would you be able to provide full coverage insurance on a vehicle registered in your name without a license?

If you are a cash buyer, and you want to register the vehicle in someone else’s name (someone that has a valid driver’s license) then you can buy a car. Or if you are a cash buyer and you want to go buy a car from a private party, instead of going to a dealer or getting an auto loan.

Otherwise, if the WashingtonAutoCredit.com team is going to help you buy a car, then the answer is “yes” you need at least one driver’s license on the loan/registration. So, if you do not have a driver’s license, and your husband/wife has a driver’s license, then the only ways to try to get approved for the auto loan would be the husband/wife by themselves, or a joint loan with both of you on it.

If you have any other questions about buying a car with bad credit, contact the Washington Auto Credit team at 888-300-3502 or apply for a car loan online.

According to BankRate.com:

“…the median FICO score in the United States is 723…”

“A median of 723 means half the people fall below that score and half have scores higher. More specifically, here’s a breakdown of how scores are distributed across the population…”

300-499 = 2 percent of the population
500-549 = 5 percent
550-599 = 8 percent
600-649 = 12 percent
650-699 = 15 percent
700-749 = 18 percent
750-799 = 27 percent
over 800 = 13 percent

Even with a sub-par score and the difficult market you can still buy a car or a house.  It just may take a little more work and the help of an experienced loan officer like ours.
Go to our home page to find out how we can help you obatin a loan and rebuild your credit.

Lenders have found a direct correlation between monthly income and loan performance. Seems to make sense. The more money you make, the more money you have to make your payments. Granted, it does not necesarrily mean that people who make more money pay their bills on time, or manage their money well. However, the first part of paying your bills requires you to have money in the bank.

So why haven’t lenders stopped lending money to people who make less than $12,000 per month? Because lots of people who make less money than that can pay their bills on time, and repay loans. What is the lowest amount of money someone should make to consider obtaining an auto loan? The answer to that question depends on who you ask, and when you ask them.

Several years ago there were lenders that would allow someone to get an auto loan with as little as $1,000 or $1,200 in monthly income. Over the years, the average minimum income required by auto lenders has steadily increased. First, to $1,500 per month, then $1,800, then $2,000. Now, many of the lenders we deal with every day have raised their minimum income to $2,500 per month.

What does a minimum required income of $2,500 per month mean?

People that make $10/hour ($1,730/month), $12/hour ($2,079/month), or even $14/hour ($2,426/month) cannot qualify for an auto loan with many lenders. Many people live off of $14/hour or less and for many people it is impossible to find work that roughly twice the national minimum wage.

Why did this happen?

The economy started going South about a year ago, and as loan losses started to pile up the lenders have been forced to “tighten” their underwriting in an attempt to improve their loan portfolio. Higher gas prices, food prices, and unemployment rates have forces many lenders to close their doors or significantly restrict their lending practices. Let’s just hope that this “tightening” gets looser soon. Lots of deserving people need auto loans.

I’ve talked with a few clients in the last month who bought vehicles from a dealer who went out of business shortly after the sale.  This used car lot was new in town and attracted these clients with the image of a good deal.  “[The new guy] had some good deals and was easy to work with… [sort of]“.

This fly-by-night dealer has never paid for the vehicles sold, therefore never had the titles to transfer to the buyers.  This dealer has now filed for bankruptcy and will never pay the previous owners leaving them with the titles and more than just my two clients with the vehicles that may never be theirs.

Both of these customers are making monthly payments on cars for which they may never be able to get the titles.  Many others have paid in full for their cars and can’t get titles.  All of them cars that were never the dealer’s to sell in the first place.

On top of not having titles these folks are left without a dealer to which they feel comfortable going back next time they need a car.

At Washington Auto Credit we only use large dealers who have been in business for many years. We choose our dealers wisely based on stability, business practices, and inventory.  Not only will we help you get approved for the best loan you can, we will also be sure you have a friendly dealer to come back to and that you are buying a car that you will actually own.

HIDDEN CAMERA PENNY PRANK AT USED CAR LOT

Great commercial. Pennies are money too.

Many financial experts suggest that one not use an old car as a trade in when purchasing a new car. In fact, trading in your old car may ultimately cost you more or hurt your chances to get approved for an auto loan.

Most auto dealers have a certain amount of price flexibility.  The more one lessens profit margin, the less money the salesperson makes on commission. Few auto salespeople actually work for a salary that is not at least partly based on commission from sales.

If one uses an old car as a trade in, and insists on high blue book value (the highest possible value for the car) this means the price flexibility in the new car will change. The person is likely to pay more for the new car, thus rendering the trade in less valuable, even if the blue book value price is met.

Banks limit the amount financed on a vehicle based on the buyers’ credit.  The price flexibility that would be used up giving you a high price for your trade is often needed when the bank makes the dealer discount the price and pay high acquisition fees.  Paying a high price for your trade in can limit or even negate your available loan options.

Getting high blue book value for a trade in is often not realistic. Auto dealers want to take your old car in and profit from it. Therefore, they are likely to offer low blue book value so they can sell the car at high blue book value.

If you sell your car on your own, instead of using it as a trade in, you are likely to receive more money up front.  Because you have not depended on the dealer to give you a high price on your trade in, you will have a better chance of being approved for a new or newer car. Essentially you have maintained greater price flexibility.

Also, a greater cash down payment often means better financing terms for your new car. Larger down payments can mean smaller payments, shorter-term loans, better interest rates, and a greater likelihood of getting approved.

When possible, if you can sell the car at a price equal to how much you owe, you will save money when you purchase a new car, you won’t need to roll over any negative equity absorbing your old debt.

Some cars have a high enough resale value that one can get enough for a trade in value to pay off the current loan and have money left over to act as down payment on a new car. Generally, this makes sense. This can help you get down payment from your trade without taking the time to sell it on your own.