There are plenty of places to shop when you need a car in Los Angeles. However, your choices may be limited if you have bad credit. Indeed, the process of obtaining a car loan with bad credit works differently from a traditional car loan.
The car loan process
The process of getting a car loan with bad credit can seem retrograde and, in fact, it is when you compare it to a traditional car loan scenario. Let’s explain:
With a good credit auto loan, a borrower has the power and his good credit history behind him. Their credit score could be well over 700, and their credit reports are likely to show an overdue payment history with years of fees and bills paid on time. Most lenders take this as a sign that this borrower is responsible.
For these borrowers, choosing a vehicle, negotiating a price and finalizing financing documents is the norm. They can do this at any dealership that has the car they’re looking for, or they can be pre-approved by a direct lender like a bank or credit union, which makes the process even easier once they visit a dealership.
With bad credit, the process usually begins at a dealership. Because borrowers with bad credit usually need a subprime lender to get approved for financing, they must go through a dealer who uses these lenders. Not all dealerships work with subprime lenders, and not all lenders work with buyers with bad credit, so it’s important to work with the right one.
Once these borrowers find the right dealership, their special finance department submits their auto loan application for approval. If the lender approves them, they send what is called a “payment call” to let the dealer know what the customer is qualified for. Next, the customer is presented with a list of vehicles within the lender’s guidelines to choose from.
Getting a bad car loan in Los Angeles
In order to get approval from a subprime lender, you must meet a number of criteria, which vary by lender. Usually these include:
- Proof of income – You typically need to earn between $1,500 and $2,000 per month before taxes from a single source. You must bring a recent computer-generated pay stub that shows year-to-date income to serve as proof of income.
- Proof of address – You must provide a recent utility bill in your name to the address on the application.
- Evidence of a working phone – Bring a recent phone bill to prove you have a working one. This can be a landline or contract cell phone, but prepaid phones are generally not accepted.
- A list of personal references – You are usually asked to provide between five and 10 personal references. You must include names, addresses, and home and work phone numbers (if applicable) on your list.
- Identity proof – Most lenders require a valid driver’s license, although some accept valid ID. Keep in mind that you cannot register a car without a valid driver’s license.
Now that you know what it will take to get a car loan with bad credit, it’s time to find a dealer to work with in Los Angeles.
Find a special financial concession in LA
Because you can’t go anywhere in Los Angeles to get approved with bad credit, you need to know where to look before you start driving up and down the Port Freeway looking for a place to get a ready. With that in mind, why not try a simpler solution?
Here has Auto Express Credit, we are your hassle-free access to special financing dealerships in your area. For over 20 years, we’ve been connecting bad credit borrowers and local dealers across the country, and we want to help you too. Simply complete our easy car loan application form and we’ll get to work matching you with a dealer near you!