Mar 6, 2013
As our economy has been improving many of you are starting to look towards replacing their vehicle with a newer, safer, and better equipped model.   Technology and comfort certainly have changed in the last 4-5 years.  Another thing that may have changed is your credit scores.  Many people took a few credit blows on the chin during the last 5-6 years and are fearful they will not qualify for an auto loan.  I’d like to write a few words on that topic.
Auto loans are available for people with almost any credit score.  There are some things you can do to improve your chances before you even come into the dealership.
Five factors to know when applying for an auto loan
1. Credit score -There is no way around it they are going to see your bureau(s)
2. Money down-The more you have down the more likely you are to get approved and the lower the rate may be if you do.
3. Term-Shorter terms are more preferred by lenders when dealing with lower credit score.
4. Length of employment/residence-Where and how long you have lived and worked in an area will show the bank you aren’t as much of a risk as someone who jumps around frequently
5. Capacity to pay-You cannot ask for a $400 payment if you make $1500 and your rent is $1,000 of that.  You must keep your payment in line with what you can legally prove you earn.
There are many other factors that may affect our ability to secure you a loan but understanding those 5 is a great start.  I will touch upon others in future posts.  As always feel free to contact me with any questions regarding this topic or for any reason I may assist.
Dennis Marhefka, Financial Services Manager