You can choose your vehicle when you take out a bad credit car loan from a dealership. However, your vehicle choice is usually limited to what you qualify for and the lender’s requirements, so you may not be able to get your dream car or qualify for a new vehicle. Read on if you’re wondering about car requirements and other bad credit auto loan rules.
Vehicle Requirements For Bad Credit Auto Loans
More than likely, you will be working with a subprime lender if you have less than perfect credit and are in need of a vehicle. These lenders are experts in bad credit auto finance and work with many consumers who are struggling with credit issues.
In order to be approved, the type of car you choose must meet their requirements. They vary depending on the lender, but your vehicle usually needs meet these three requirements:
- Age – Subprime lenders have age limits on the cars they finance. Typically this means they won’t finance a vehicle over 10 years old, although some cap at seven years, so be sure to ask the dealership about that.
- Mileage – Just like age, lenders have a maximum mileage that they consider. Typically, a car should have less than 100,000 miles on the odometer, but this varies by lender and model year.
- Amount financed – Each lender sets the minimum amount he is ready to finance. Usually this is $ 5,000, but this also varies depending on the lender. Keep in mind that this is the total amount financed and not the selling price of the vehicle. You can finance a car with a sale price of less than $ 5,000 as long as the amount financed with extras like an extended warranty meets the lender’s minimum.
What you are eligible for also depends on your particular situation. The lender evaluates your request and issues a payment call to the dealer. This lets the dealership know which vehicles in their inventory you are eligible for and which to choose from.
Other requirements for bad credit financing
Of course, the vehicle you choose is only one piece of the bad credit auto loan puzzle. When it comes to be entitled to a loan, each subprime lender has different requirements that borrowers must meet, but they are going to ask you to prove these three things:
- Returned – A recent computer generated pay stub showing cumulative income is required. Subprime lenders generally require that you make a minimum of $ 1,500 to $ 2,000 per month before taxes for a job.
- Residence – A recent utility bill in your name showing the address indicated on the application to serve as proof of residence.
- Telephone – A recent phone bill in your name, which can be a landline or a contracted cell phone, is also required.
The bottom line
You can choose the car with a bad credit auto loan, but what you qualify for depends on your situation and the lender’s requirements. For more help, you can use our payment calculator and auto loan estimator.
That’s not all Auto Express Credit offers, however. We can also put you in touch with a local dealership who has the loan resources you are looking for. We’ve been helping consumers with credit problems find financing for over 20 years.
Our service is simple, free and without obligation to purchase. Start now by completing our auto loan application form!