Determine your Finance Type - Auto Finance Tips

Your credit report will determine the interest rate (APR) and the type of financing that you will need.

Prime Financing:

If you can get Prime Financing then that means that you have good to excellent credit. Usually your credit score is above 680. Now the best place to obtain your financing is to deal with your current Bank or Credit Union. Most Banks and Credit Unions have multiple ways to submit your application ( phone, on-line or in person) or Apply with one of our Lenders to get the best interest rates possible.

By getting your financing lined up ahead of time, you can actually shop for your next car, truck, suv, or van as if you were paying "cash". You will automatically have the upper hand including getting the best price and service. You will also get the best interest rates plus you will only have to put a minimum down payment if any at all.

Suprime Financing:

Now if your credit score is below 680, then more than likely you will be needing subprime. Whether you will need Sub-prime or 2nd chance will determine what your credit looks like. If you have paid a vehicle loan (even if there was some late payments) and are either paying on other things like a Mortgage, credit cards that have not been charged-off ( sent to collections), or a first time buyer with at least a year on the job, a couple of paid credit lines with no charge-offs ( collections) then you will probably qualify for Sub-prime which will get you better interest rates than 2nd chance financing will. You will probably have to put about 10-15% down payment. You can get a Subprime Auto Loan with one of our Subprime Lenders.

2nd Chance:

2nd chance: Credit Scores under 580 - If you have a Repossession or foreclosure, no real stability and some charge-offs or a first time buyer with charge-offs on your credit bureau than more than likely you will have to rely on 2nd chance financing. This means that you will be paying higher interest rates. Now, this ain’t the end of the world. First off by getting 2nd chance financing you will probably not be able to get an expensive of a vehicle, which means that you will not be paying insanely outrageous overall interest. Your loan will be reported to the credit bureaus so that it will help you get re-established and it will give you the opportunity to drive a nice car, but you will have to put about 20-30% down payment. 2nd Chance Lenders.

In House Financing:

Now if you have really bad credit including multiple repossessions, foreclosure, charge-offs etc. or if you are currently late on your mortgage, child support or undocumented then more than likely you will need to get In-house also known as Buy Here Pay Here financing. These means that you will have to put about 40-50% down payment and will have the highest interest rates allowed by your state. The only upside to this situation is that at least you will be able to get financing. Now most Buy Here Pay Here dealerships do not report to the Credit Bureaus except large In-house financing dealerships like Drive Time.