Do You Need Credit to Finance Used Car?

Remember the good old days when credit didn’t matter? Those carefree summers when you paid for your gas in cash and went to the movies with friends ended the moment you turned eighteen and adult life started calling. The national credit system likely found you soon after you graduated high school, and your financial life was forever changed.

If you went to college, your first interaction with credit was likely applying for student loans. Many students end up needing a co-signer on their loans because they have a young credit history. For some, credit cards came at the age of eighteen and with them the debt racked up. Sometimes, people even avoided working their way into the credit system by rejecting credit cards and loans. However, avoiding credit altogether is also not sustainable in the US economic system. In fact, most big purchases require credit, so people with poor credit or those who are new in the credit system can find themselves in a sticky situation when it comes time to make their first big purchase.

Cars and the Credit System in the United States

One of the first big purchases that people make is a car. Essential for most lifestyles in the United States outside of major metropolitan areas, a car is necessary to get to and from work, most formal functions, and even sometimes to get to events that sustain the soul – like movies with friends. If you opt to purchase a used car from a third-party, or you feel as though you make enough money to buy a new car, chances are you’ll need to apply for a loan or a line of credit. Unfortunately, if you have a new credit history or issues with your credit history, you will likely experience problems getting the money you need to make this purchase. You’ll end up being denied, being offered much less than you expected, or being offered a loan with a hefty interest rate on it.

However, there are alternatives to financing a used car through a bank loan or line of credit – and no, they don’t require phoning home to ask mom and dad for a little extra cash. Purchasing your next car from a buy here pay here dealership is one of the best ways you can skirt around your credit history and obtain the transportation that you need.

How Financing Without Credit Inquiry Works

The credit system was set up to allow banks and other financial institutions an easy way to approve or deny someone based on the quality of their financial history and payments as well as types of accounts that they have open. In essence, the top credit bureaus in the United States collect data on every account you have open – your banking information, your credit cards, your educational loans, car payments, house payments, and other lines of credit. They look at how many accounts you have open, what balance percentage you have on those accounts, and whether or not you make your payments on time. Based on these elements, they provide a credit score which is how banks and lenders determine whether or not they are willing to lend to you.

In some instances, this is a very efficient way to determine your financial state. It allows you to apply for financing and get it relatively quickly. However, this is not always a good indication of a person’s ability to make on-time, consistent payments and therefore can unfairly disqualify them from getting financial assistance. Additionally, even if you are approved, the wait time for loan disbursement is usually weeks. Not everyone has that kind of time.

In-house financing on a used car allows people with credit issues to apply for financing on a car based on specific financial factors. Using the application and a brief interview with a potential car buyer, a buy here pay here dealership salesperson can determine how much money on a payment a person can afford each month. So rather than picking out a specific car and applying for a loan for the amount of the vehicle with a bank, something that might or might not happen, a financial specialist at a buy here pay here dealership will help you understand how much you can afford to pay down on a car each month and will show you car options based on that amount. That way, you never get forced into a car purchase that might not work for your financial situation, and you’ll be able to make a purchase regardless of your credit history.

Will I Still Be Able to Get a Quality Car?

A worry that many people have when it comes to used car financing is that they will not be able to afford a quality car when they finance through a buy here pay here dealership. Buy here pay here cars are still quality cars, and if you go to the right dealership, you’ll be able to tell that they put time and effort into providing their customers with used cars that are worth their money. At Auto Now of Belton, we are so sure about the quality of our vehicles that we provide a 24-month warranty on each of them. This warranty assures that we have assessed the reliability and road-readiness of each of the cars on our lot and are sure that you will have no significant issues with them for two years.

Warranties are important to look for when previewing cars at used car dealerships. You’ll know you’ve come to a quality dealership if they can put their money where their mouth is and provide you with a car that they would be proud to drive.

Live in the Belton area and are in search of a great used car? Auto Now of Belton has all the tools you need to make your next used car purchase a successful one. Quick and easy online applications, friendly service ready to help you whenever you might need, and affordable and customized payments are some of the things that we pride ourselves on. You won’t find this type of service at any of our competitors. To see for yourself what kind of a difference you can get at Auto Now in Belton, visit our location at 307 East North Avenue, or give us a call at (816) 331-2100.