Have you got a FICO score of 620 or less? More and more consumers in New York are resorting to buy here pay here car lots, which offer funding with no credit check. As a rule they are more concerned with your income and history of employment when it comes to approvals. The dealer functions as both lender and dealer. However, these dealers can be tough to find. Often, the best way to recognize them is through banners that say things like: we tote the note, we finance, your job is your credit, or rent to own.
How to Get Approved for In-House Financing
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Unlike a bank or finance company, these dealers rarely have minimum credit requirements. That said, most dealers do have a minimum monthly income requirement: $1500. This is income before taxes, not what you take home.
This emphasis on income, rather than credit, is the reason these dealers will often tell you: your job is your credit.”
Do These Dealers Require a Down Payment?
Down payments are to be expected with a buy here pay here dealer. These are very high risk lending scenarios, so a down payment protects the dealer against losses sustained if the borrower begins missing his or her payments. You might want to go with the smallest down payment possible. A down payment will protect you against negative equity, but it’s also money that you could put in an emergency fund.
Making Your Payments
Have you ever had a vehicle repossessed? Not only do you lose your car and down payment, if the dealer reports to the credit bureaus, it will have a negative impact on your FICO score. This is not always the case with BHPH dealers, but suffice it to say, repossession is not something you want to experience.
To avoid a problem like this, choose a car with low monthly payments, perhaps just 5-8% of your monthly income. Be sure to read the terms and conditions in your contract. That way you’ll know just what to expect. Some dealers install GPS trackers or kill-switches to help with the recovery process.