Lender Constraints(or why you can’t always have the car you want)

In the previous post we talked about things you can do to improve you chances of getting financed, this time we will talk about what the dealer can do to improve your odds.  Here is how this scenario lays out, you found a vehicle you like, the dealer submits the paperwork to the lender for an approval and the lender calls back and says we are not interested in approving this customer on this car, but if you find a vehicle that fits these guidelines(which we will discuss a little later), we would consider extending them a loan.  Now the last thing a dealer wants to do is switch cars around on you, especially after you have found one you like, but given the two options, the first one is telling you we cannot finance you and you leave without a vehicle or the other option, we can probably secure financing for you if we change vehicles, the dealer is going to make every effort to find a vehicle that fits the lenders qualifications, since the bank has hinted there is a chance for an approval.

There are several reasons the banks make these demands, but most of these demands are made with one thing in mind, they don’t want you in a car that may break down and you have to make a choice between making you car payment or a repair.  Most of the time this conditional approval is pretty standard, they would like to see you in a vehicle that is a 2002 or newer, generally no more than 75,000 miles, and something with an $8,000 max price.  Keep in mind this is a positive, if we find a vehicle within these parameters, most likely you will be approved for a loan.

Now here is the part that most people have difficulty understanding, the cars that fit these parameters are  not usually trucks, vans, or SUV’s, they are generally small to midsize sedans.  When looking at these cars, understand it is not your dream vehicle, but if you make your first 12 payments on time, chances are you will be able to trade that car for the vehicle you want next year, it all comes back to re-establishing your damaged credit.

This just a way to get to the vehicle you want, this may not be your ideal vehicle, but in my experience these vehicles are always much newer and nicer than the current one you are driving and have thousands less miles.  So the downside is you get to drive a better vehicle for a year while you rebuild your credit to get the one you really want.  As your credit improves your loan options will open up and you won’t have to deal with banks that tell you what you can and cannot buy.

South Pacific Auto has a very successful stair-step program in place, we have seen many customers go from our in-house financing program to getting financed with preferred lenders with low interest rates.  If you are ready to turn your credit history around and start rebuilding your credit, give me a call at (541) 974-0780, email me at jon@southpacificautosales.com, or fill out our online application by clicking here.

South Pacific Auto Credit Blog

South Pacific Auto has 18 years experience in helping customers with damaged credit, the main purpose of this blog is to help our customers understand their situation and to help them better their credit rating.  We will be posting video’s and text with explantations of what a bank looks for when considering a loan and things you can do to improve your odds of securing a loan.  We are ecouraging people to leave feedback, if you have any questions please let us know, this blog is being designed around the needs of our customers.