Are you a Credit Challenged Person? Here's What Not To Do!

If your human and you speak English you've undoubtedly hear the term "sub-prime" at some time over the last twelve months. For those of you still in doubt "sub-prime" basically lumps all those folks who have blemishes on their credit reports into one large, sprawling category of people. According to the experts, supposedly less than half of us fall into this category. I'm not one to argue with the experts but I will tell you that far more than half of potential car buyers fall into the sub-prime sector of the credit world.

This isn't always a big deal. Like I said before this is one large category. Those in the upper echelon of the sub-prime world usually won't have much of struggle finding financing for their new vehicle purchase as long as they have stable employment, a down payment, and decent residence history. You might be this person if your worst sin is paying late on a couple of credit cards now and then. Unfortunately for me, even this customer is becoming more and more difficult to find.

More and more of us seem to be having difficulty meeting our obligations lately. Which isn't necessarily the end of the world. If your local dealer is any good at all he or she will have multiple financing options available to provide loans for the majority of folks that come on the lot. What most customers don't understand however is that these programs are very expensive for both them and the dealer. These programs also sometimes seem to require more information and documentation than a Top-Secret clearance from the U.S. Government. Unlike horse-shoes and hand grenades almost isn't going to cut it either. Which is why often times an otherwise qualified buyer gets turned away.

It is how you respond to this rejection Mr. or Ms. Customer that will ultimately decide your fate. If you graciously accept the bad news and go home to start compiling the necessary information and politely keep your salesperson in the loop during this process, your dealer is likely to go to the ends of the earth to obtain financing for your desired vehicle. I can say this with some authority because I have personally gone to great lengths to get folks approved who really had no business getting a loan other than the simple fact they worked just as hard if not harder than I did to enable me to help them.

Upon hearing the word "no" most folks transform into what I like to call Mr. and Mrs. Entitled. They become indignant, they shout, they accuse me of wasting their time, and they demand an approval as if we can just arbitrarily change the bank's decision. Keep in mind, these folks are typically people who have never paid anyone for anything ever. Life, however, has dealt them a bad hand and because of whatever situation they find themselves in (usually one of their own creation) they feel they deserve a car because they need one. It is completely beyond this type of person's comprehension that the stock holders of the lending institutions they applied to couldn't care less about what their needs or wants are. You have to remember folks when you apply for a car loan you are asking someone for their own hard-won, cold, hard cash. Sure, they might get to hold the car as collateral but your vehicle isn't going to cover their payroll or pay their stockholders' dividends if you don't make your payments. If you've never written a good check in your life there is very little reason for someone to take a chance on you. If you couple this with the mentality of a five year old in a toy store, most of us normal folks will slam the door in your face and won't lose a moment's sleep about it either.

If your credit challenged you now know how important it is to have a good attitude when visiting your local car lot. You also need to be realistic. If you know you've rarely gotten the urge to pay a bill you should know that you are not going to be allowed to purchase your dream car either. Most automobile loans are based on a car's book value, or percentage of said book value. I'll be the first to tell you that most cars older than ten years don't have much of a value, no matter what your dealer may tell you otherwise. Most cars with more than 7o or 80 thousand miles on the odometer also don't hold much of a book value. So your dreams of that ten year old Mustang or Camaro or Corvette are not going to be coming true if your credit isn't the best. On the flip side of that coin, if you make $1600.00 a month, you are not going to be qualifying anytime soon for a thirty or forty thousand dollar car. You'll have a hard enough time getting approved for a twenty thousand dollar car.

I know this probably sounds like a typical line from a salesperson but in these situations we probably are better qualified than you are to determine what vehicles will give you the best chance of winning an approval. If your credit challenged, tell your salesperson this up front. We're going to probably figure it out on our own but it will save everyone time if you come clean at hello. Nothing shouts "get me financed" like a customer who is all to willing to pay full sticker for the first car they test drive. If your really unlucky you may actually get financed and end up like the customer in my Shopping... post. Be honest with your salesperson. He or she wants to help you. Chances are, he or she won't be getting paid unless they are able to successfully help you. Couple this financial motivator with a good attitude and honesty from you and your likely to find yourself driving sooner than you think.

This post was inspired by a young lady who attempted to purchase a vehicle at my store today. She was informed she would be better qualified with a co-buyer and politely sent on her way. After speaking with her salesperson via phone no less than six times in the first hour after she left she finally got to me. Her first words to me were "Aren't you going to help me get a car?" After replying that I could only do that if she found a qualified co-buyer she responded with "Aren't you supposed to call my family to ask them for me?" I of course informed her that I could not and would not be doing any such thing and she proceeded to spend the next two minutes colorfully telling me that I didn't deserve her business anyways before hanging up.

She was right. I don't deserve her type of business. No one does.