If our credit score was between a 600 and a 660 FICO we are what they would call a non-prime borrower. Meaning we can most likely purchase most any vehicle we want depending on my Income but we will most likely pay a higher interest rate. One way to avoid paying the higher interest; is with money down or purchase in an equity position in relation to book value. Later you will read how The Credit Ninja accomplishes this task, allowing nonprime clients to take advantage of the absolute best financing programs available.
If our score falls between 501 and 600 we are in what's called a subprime market. Limiting the vehicles we have to choose from. Now I know this is not what we want to hear but it is the reality. And believe it or not; it's for a great reason, which i'm about to go over so stay with me!
The Lenders don't want to give us a "bad deal" that's why they typically are only able to lend 80% loan to value in this situation. Meaning if you are buying a car valued at $100,000, the bank will only give you $80,000 towards the purchase, not to mention taxes and fees. This becomes a huge problem when you have no money to put towards the purchase and have no time to save. The way The Car Credit Ninja is able to avoid this problem in most cases is to sell a vehicle to the client behind or at a lower value in comparison to what the experts say its worth (Kelly blue Book or NADA). Because we buy our program vehicles mostly in bulk we pass the saving along to you allowing purchases with little to no money down. But remember all situations are evaluated on a case by case basis, if there is negative equity involved that may be a different problem, but not one we are a stranger to. The nice thing about buying a car the Car Credit Ninja way is we are able to take advantage of these program cars allowing you to rebuild and reestablish in the fastest way possible while in a low mileage reliable vehicles without putting money down in most cases.
If your credit score land between a 300 -499 you are in a category which is called deep subprime credit. Most likely you will need money down or a co-applicant to get you jump started and to prove to lenders that you are able to make on-time scheduled payments. Car Credit Ninja is most familiar with handling these situations because over 20% of americans are in this dilemma. most of our applicants fall within this category. Our clients find their way to financial freedom by being guided through a process that is proven to help reestablish and rebuild their credit. Once you prove yourself in most cases within a year of ontime payments and you have not defaulted on any other obligations you will most likely be able to refinance. Refinancing with a local lender or credit union would lower your interest rate and allow the co-applicant to be released of any responsibilities.
With a little education we believe we can make a difference in the way our clients buy so less people are in these unmanageable situations down the road. A little guidance on how to buy responsibly, we believe, will go a long way. Next week explore more in depth on the types of cars to buy and what effects the equity position has on the deal. Because the greater the equity, the more you save!!