Getting Approved for Used Car Financing After Being Turned Down at an Auto Dealership

Getting Approved Used Car Financing After Being Turned Down At Dealership - USA Auto AZ

Find Used Car Financing After Being Turned Down Elsewhere

If you’re in need of a vehicle and you’ve already been turned down for financing at a major dealership, is all hope lost?

No, not at all.

If you have a trade-in or a small down payment, there is still a chance you could be approved for a loan to take home a reliable preowned vehicle. Yes, this is all possible even if you have poor credit or no credit.

There are some dealers that are more willing to work with you and that have more flexibility than the most of major auto dealerships around town. This article will cover the typical minimum requirements you need in order to secure a loan for a used vehicle, even with bad or no credit.

What You Need for a Used Car Loan If Your Credit Isn’t Strong

Is your credit score below 600? If so, that’s considered “bad credit.” Your credit score can go this low if you’ve missed payments, had a bankruptcy or foreclosure, borrowed nearly the full amount of your credit limit, etc. Or, perhaps you’ve never built up your score in the first place by borrowing and making payments.

If you didn’t know what your credit score was before, you likely know now after an auto dealership has turned you away. Even with bad credit, though, there’s still a chance you can secure financing. Now, you likely won’t be able to get a $30,000 vehicle, or even a $20,000 used vehicle.

But, something about $12,000 or less might be realistic. This is a possibility if you can prove:

  • Current job and stable work history: If you have poor credit, but you currently have a full-time job and can prove you have a stable work history over the last few years, this will go a long way toward getting a used car loan.
  • Home ownership or consistent rent payment history: If you can show you’ve made consistent and on-time payments toward a mortgage or lease over the last couple of years, this signals to a potential lender that you should be able to make car payments, too, even if your credit score is suboptimal.
  • Personal banking or checking account: Even just having a personal savings or checking account and showing that you haven’t overdrafted in the last couple of years can help make your case for a used auto loan. It won’t be the primary factor, but it does help.

Use Small Lines of Credit to Build Up Your Payment History

Used Car Loan With Bad Credit - USA Auto AZAs you’re looking for your next vehicle, you don’t have to stand pat with your current credit score. Use your current credit cards or maybe open up one new line of credit and start paying it off monthly. Buy your groceries or pay certain bills with a credit card each month, and then pay off the balance at the end of the month.

This will help your credit score go in the right direction, but more importantly, it starts to signal that you can handle monthly payments. In doing so, you’ve made a stronger case for yourself when it comes time to apply for an auto loan, even if your credit hasn’t quite escalated out of the “bad score” area yet.

A Down Payment Helps

Whether you meet all of the aforementioned requirements or not, having a down payment or a trade-in is going to improve your case for auto loan approval.

What’s an ideal amount to put down? Obviously, the more you have to put down, the better. But even having $500 to put down goes a long way – or $1,000, if you can swing it.

Having a down payment ready is a sign of good faith to a lender that you’re serious about making payments on a new-to-you vehicle.

Or, if you have a car trade-in that falls within that $500 to $1,000 range, it could work in lieu of a down payment. But even if you do have a vehicle to trade in, it’s still worth it to have a few hundred dollars ready to put down on top of the trade-in. This will help you with getting approved for a loan, and making your payment terms more attractive, as well.

If Your Loan Was Denied After Being Approved at the Dealership

This is happening less and less often, but sometimes a dealership will send you home in a new vehicle and then call you about a week later to tell you that your loan was “denied by the bank.”

How does this happen? The dealership can only predict what the lending institution will approve, but it’s not always correct. The lender may not like the terms of the loan based on the background of the person requesting the financing.

If this happens to you, be prepared to give back the vehicle and to walk away. Unless the dealer can work out a new deal at the originally-agreed-upon terms, give them the keys to the vehicle and then leave the dealership.

At this point, it’s time to look elsewhere for your next vehicle. There’s a good chance that another dealer and a lender out there can approve you for a loan in order to take home a dependable preowned vehicle.

The Advantages of Buy Here, Pay Here Financing

At USA Auto AZ, we see customers as much more than their credit score. We know that there is more to them, and that they have alternative ways to prove they are worthy of an auto loan approval.

If you’re committed to buying one of the vehicles from our lot – located in downtown Mesa, AZ – and if you meet most or all of the conditions mentioned earlier in this article, then we will do everything we can to get you financed for the vehicle. We have more than 70 preowned vehicles available at any given time, from coupes and sedans to trucks and SUVs, and sometimes even minivans.

Opportunities open up to you when you explore “Buy Here, Pay Here,” financing. Choose USA Auto AZ when you’ve been turned down at another dealership and if you’re looking for a dealer that’s more understanding and committed to getting you into your next vehicle.

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