If you live in the Windy City and have bad credit and hope to finance your next vehicle with a bad credit car loan there is one type of financing that most legitimate bad credit lenders will not do.
We have the tools
Bad credit auto loan web sites such as ours at www.autonetfinancial.com can help you if you’re serious about reestablishing your auto credit. By filling out the online auto loans for bad credit loan application, Second City applicants can begin a new financial chapter in their lives by getting approved at one of our affiliate metro Chicago dealers for car loans with bad credit. Along with paying the rest of your obligations on time, you will then be able to raise your FICO scores as well as reestablish your car credit.
But the process can be even more expensive than it has to be – especially if you choose the wrong kind of loan or the wrong kind of vehicle. Choosing the wrong kind of loan from a Chicagoland Tote the Note, We Finance Everyone car dealer can be a problem because these dealers don’t report your payment history to the credit bureaus, while picking a vehicle that’s barely within your budget can lead to repossession.
One of the keys to successfully rebuilding your credit has to do with focusing on the basics. In this case, it means that before you fill out our bad credit car loan application, you need to know how buying and leasing vehicles applies to metro Chicago credit-challenged consumers.
Windy City leasing basics
When you lease a vehicle, you pay for only that portion of the car that you actually use. If this seems confusing, here’s how it works: when a bank leases you a car, there are two components to your lease payment – the interest expense (known as the money factor) and the depreciation expense of the car.
For example, in a two year lease, the bank computes a 24 month residual value (the projected value of the vehicle at the end of the lease) and subtracts this value from the price you pay for the car. This is the depreciation expense. The bank then computes two years worth of interest.
These two amounts are then added together to get the total lease amount and then divided by 24 (the number of months) in order to get the monthly base payment. This base monthly payment is what your state bases its sales or use tax on and, once that is factored in, you have the total monthly lease payment for your car.
Because this monthly payment is usually lower than a retail payment (buy), it makes the car more affordable to own. But because you are paying only a percentage of the actual value of the car over the lease term and the buyer usually never has any real equity in the vehicle, lenders usually reserve leasing to only their best customers. Because of this, leasing is really not an option for Chi-Town buyers that have bad credit.
Chicago buying basics
Buying, usually called retail financing, is where the buyer finances the entire cost of the car less any down payment or trade equity. Most bad credit lenders that do business with Chicago area dealers require a 10% down payment or $1,000 down, whichever is less. This down payment not only reduces the amount financed, it gives you an equity stake in your vehicle as well – something that’s important to bad credit lenders.
The Bottom Line for Chicago buyers
Once you’ve had a chance to the rest of the information on our web site, you should be able to understand why Auto Net Financial has helped so many Chicagoans with bad, blemished, bruised and tarnished credit buy a car and reestablish their credit at the same time.
So why not begin the process right now by filling out our secure online bad credit auto loan application to see what we can do for you.
