U.S. car ownership rates in the past year have grown quite a bit. A Census Bureau report shows that in 2020, 91.5% of U.S. households own at least one automobile, up from 90.9% in 2015. Despite this, there are still approximately 8.5% of American households that have no access to a vehicle. A passenger car is not available to 10,506,000 low-income families.
This is a serious concern given that an automobile is crucial when finding employment, getting groceries, going to the hospital, and bringing the kids to school. Every household should therefore have a personal vehicle for such purposes.
Conveniently, there are car dealerships that address this issue. Read the article below to learn more about car dealerships that work with low-income families and individuals.
How To Qualify For A Car Loan With Low Income
Car financing can be challenging and considerably more difficult if you have poor credit or a limited income. Perhaps you’ve already made several dealership visits only to be rejected because of your financial situation.
Owning a car can bring several life-changing opportunities, but being denied an auto loan may prevent you from ever experiencing them. It is possible to get an auto loan even with low income or poor credit if you follow certain steps. Check them out below.
Learn Everything About Your Credit And How A Loan Affects It.
Regardless of good or poor credit, you should always educate yourself about credit scores and how loans impact them. Keep in mind that your credit score is significantly affected by a car loan.
For instance, your credit will improve if you pay your dues before the deadline. However, your credit score will drop if you skip payments or pay past the due date.
Determine Your Eligibility.
Credit score plays a major role in determining the amount you qualify for with a car loan. However, it is not the only factor considered by dealerships, especially those belonging to low-income households.
They also take a look at other factors, such as:
- Employment
- Wage earned-to-debt ratio
- Current living situation
Look For Dealerships That Work With Bad Credit And Low-Income.
Finding a reputable car dealership or auto loan lender close to your residence will be the next step once you know how eligibility for low-income individuals or those with poor credit is determined.
When evaluating the dependability and reputation of a dealership, there are a few factors to take into account, including:
- User-friendly website
- Extensive inventory
- Clean facilities
- Pleasant customer service
- Trustworthy car loan and financing programs
Have A Co-Signer.
You should consider having a co-signer when seeking car financing from a local dealership. With a co-signer, dealerships, and lenders will likely have more confidence, and financial security since co-signers take over defaulted or missed payments. Thus, you may obtain better loan terms and lower rates.
Auto Loans For Low-Income Families And Individuals
Our ability to afford significant investments, such as houses and cars, is greatly influenced by our credit scores. However, most lenders and dealerships prefer to grant loans to well-off individuals and families with good credit scores.
Nevertheless, lends, banks and dealerships still work with low-income families and individuals with poor credit.
Online Subprime Lenders
Loaners from Online Subprime Lenders provide loans to low-income households whose car financing is frequently rejected. They offer favorable terms and lower interest rates to financially struggling individuals to help them afford a new vehicle and rebuild their credit. Moreover, their application process is quick and simple.
Subprime Bank Loans
Subprime Bank Loans are composed of large banks that provide auto loans to people with bad credit scores or low income. However, compared to Online Subprime Lenders, this program has a more rigorous application process and stringent eligibility requirements, which include the following:
- Proof of income
- Proof of employment
- Home address
- Job history
Buy-Here-Pay-Here Loans
Buy-Here-Pay-Here Loans partner with small, local dealerships and large car franchises to provide auto and car financing to low-income households and those with bad credit. Their auto loan programs have relatively lower interest rates and longer recompense periods. However, qualified applicants must pay a large down payment and have weekly or biweekly payment terms.
CarDirect Financing
CarDirect Financing offers auto loans tailored to the financial situations of low-income families and individuals. The company collaborates with an extensive network of car dealerships that offer poor credit car financing.
Moreover, CarDirect Financing also works with several lending institutions and banks that can help you find the best car loan plans. It is relatively simple to apply, and only a few requirements are needed, making it an ideal choice for most low-income households.
If you have unexpected car problems that need immediate attention, read this article from Gov Relations on various car repair grants to check out.
