Greensboro NC Used Cars – How Can I Qualify for an Auto Loan?
If you don’t have great credit, you might be worried that you can’t afford an auto loan. Maybe you’ve even been turned down before after finding your dream car. It can be heartbreaking and even embarrassing. Here at Peters Auto Mall, we work with customers who have a wide range of credit scores. Whether you have perfect credit or not-so-perfect credit, we can help. We even work with people who have no credit history. Our goal is to help all customers find Greensboro NC used cars they can afford. Buying your next car should be easy!
How Auto Loans Work – A Brief Overview
First, for those of you who may be looking at your first vehicle, let’s briefly go over how loans work. Why does a credit history matter? And is it the only thing that matters to lenders?
When you buy your first (or next car), a loan will cover whatever money you don’t have in hand. Very few people can afford to pay for a car outright. So, you’ll put a little money toward the purchase price and get a loan for the rest.
Lenders are taking a risk by giving you such a large amount of money. They look at your credit history to see if you are worth the risk. If you have not paid back previous loans, some lenders worry that you won’t pay back this loan either. So, they might decline to lend money, which means that you can’t buy the car.
Another option that lenders have is to raise your interest rate instead of flat-out saying no. All lenders charge interest, but the riskier you are, the more you’ll pay. In other words, if a lender is going to risk that you’ll miss payments, they want a bigger reward.
Here’s where we come in. We work with lenders who will take on people who have a less-than-spotless credit history. Let’s face it: we all have things in our past that we wish we could forget. If you made a poor financial decision when you were younger, we believe it shouldn’t stop you from buying a car today. Instead of looking at credit history alone, our lenders look at other factors as well. We’ll fight to find you the best interest rate possible.
Once you are accepted, it is very important to pay your auto loan on time every month. If you do, you’ll start to build a good credit history. This will help you buy future cars, as well as get approved for other loans, such as a mortgage. If you build your credit, you might even be able to refinance your loan later for a lower interest rate.
At Peters Auto Mall, our team works with you to find a car you can afford. We want you to be confident that you’ll be able to pay your loan every month. One of the reasons some people have poor credit is that they bite off more than they can chew. If you aren’t sure what you can afford, we’ll walk you through the process. It always helps to have a solid number in mind before you start shopping. Some dealers will let you fail just to make that sale. However, we care about you and your credit! We know that if you continue to build your credit, you’ll come back every time you’re looking for a vehicle. We care about our customers. It’s part of what makes the Peters experience different from shopping at other lots.
Maximize What You Can Afford with a Down Payment Toward Greensboro NC Used Cars
One of the best ways to afford more expensive Greensboro NC used cars is to have a bigger down payment. The size of your down payment isn’t dependent on your credit history. Therefore, it is easier to control, even if you’ve made financial mistakes in the past. Simply put, your down payment is the amount of money you can pay upfront when you buy a car.
Most lenders like to see 20% or more as a down payment. If you have less than that, we might be able to work with you. It depends on other factors. We’ll do our very best to get you approved for the car you want.
We recommend that you don’t clean out your bank account completely. It is important to have a cushion for emergencies. However, a bigger down payment makes it easier for you to get a lower interest rate. Additionally, it makes it easier to get approved in the first place. You become less risky for a lender if you have contributed some of your own money toward the purchase.
If you don’t have a big down payment, don’t worry. There’s another way to put more money toward your next car: trade in your current car. When you sell your current car, you’ll have cash for a down payment. Remember, if you have a current auto loan, you’ll need to pay it off first. Lenders don’t allow you to continue making monthly payments for a car you no longer own.
Here at Peters Auto Mall, we can buy your current car to help make this transition hassle-free. We’ll look over your car and give you a quote based on the current condition, age, mileage, and other factors. Our quotes are good for a full week. Therefore, you have time to shop around. If you can find a better deal elsewhere, we encourage you to go for it. Otherwise, we’ll buy your car and can apply the money to your down payment. You don’t need an appointment; just stop by with your paperwork.
Income Qualifications for Greensboro NC Used Cars
Credit history isn’t the only factor our lenders use when making a decision about your auto loan. One other large factor they will use is your income. When you show proof of income, you make yourself a lower risk. And, as we’ve mentioned, creditors don’t like risk!
You can increase your chances of approval by shopping for a car in the right price range. So, how much can you afford based on your income? This is going to depend on a few factors:
- Your fixed bills, such as your rent/mortgage and other loans
- Monthly expenses that fluctuate, like your utility bills, food, and transportation
- Potential debts that are not fixed monthly bills, such as a credit card payment or line of credit
- Savings (aka money that is readily available to you when you need it)
- Investments (aka money that is yours, but more difficult to access quickly, such as CODs, stocks, and retirement accounts)
- Any other sources of income beyond your job (such as driving for Uber)
Essentially, we look at how much money you have coming in and how much money you have going out. This helps us find a car that fits your monthly budget.
Often, you will have some wiggle room. It is sometimes surprising how much you can save by making small changes like eating at home more often. However, keep in mind that all vehicles come with costs other than the monthly payment. These include:
- Car insurance, which is required in most states and required by most lenders
- Gas, especially if you are switching from a car to an SUV or truck
- Annual North Carolina state inspection (and emissions test if you live in a location where this is required)
- Preventative maintenance, such as oil changes
Again, we want to make sure that you choose a car you can actually afford. We don’t want you to be surprised at the cost of car ownership. Certainly, we don’t want you to struggle to make your payments.
Here’s the good news: we have cars that fit most budgets! No matter what your current income and expenses, we can help you find a vehicle. In fact, we even have cars that are under $5,000. Whether you are looking for a reliable car for your teen driver or a fully-loaded truck, we can help.
Cleaning Up Your Credit History
If your credit isn’t perfect, you can take steps to make it better. While building good credit does take time, there are a few things you can do to make an immediate impact. By taking these steps, you can also get a lower interest rate in many cases.
- Dispute any incorrect information.
Many people have incorrect information on their credit history. You might have the same name as someone else, which can cause errors. Or maybe a previous lender entered information incorrectly. Also, you may wish to legally dispute bills that you don’t believe you should have to pay. Disputing can immediately help your credit history. Lenders can see that there is a dispute and some information may not be accurate.
- Pay any overdue bills.
The longer a bill is overdue, the worse it looks for your credit history. In other words, a bill that is 60 or 90 days late is worse than a bill that is 30 days late. If you can’t pay off a bill completely, call the creditor. You may be able to work out a payment plan that removes the black mark on your credit report. Most creditors, especially credit card companies, are willing to work with people. As long as you’re making an effort to pay, they’ll negotiate with you.
- Create a history if you have none.
Any payment history helps you build credit. So, consider getting a credit card, charging a very small amount every month (like your morning coffee). Then, pay off the balance in full every month so you don’t pay anything in interest. However, be careful that a new credit card doesn’t tempt you to overspend. Additionally, avoid opening too many new accounts. A single new credit card with a good track record of payments can help. On the other hand, opening several credit cards at once is a red flag to lenders.
- Negotiate more credit (that you don’t use).
Having more available (unused) credit is a positive thing to lenders. It means you have more money at your disposal if you need it. If you have a credit card currently, call and ask them to increase your limit. However (this is key): do not spend that extra money! A higher balance is not helpful and can actually hurt you.
For more tips on improving your credit score, check out Nerd Wallet’s “7 Ways to Build Credit Fast.”
Get Pre-Approved and Start Shopping Now for Greensboro NC used cars
Are you ready to find that car of your dreams? No matter what your credit score, we’re ready to help you shop for your next car. When test driving Greensboro NC used cars here at Peters Auto Mall, you don’t have to worry about the loan. Simply come by with your financial information and we’ll help you figure out what you can afford.
We’ve been offering the best-used cars to the Piedmont Triad area for more than 25 years. We are focused on our customers. Our goal is to make sure that they find exactly the car they are looking for at a price that fits their budget.
You can even get pre-approved from the comfort of your own home! Get approved instantly by clicking on the icon at the top right on this page. We don’t even need your social security number. Answer a few easy questions to see your maximum loan amount. Don’t worry; this won’t hurt your credit and you’re under no obligation. If you like what you see, schedule a test drive today or stop by either our High Point or Greensboro lot to find your next car. Or, give us a call at 336-434-1610.