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How to Rebuild you Credit with Metro Motors KC


1. Getting Your Auto Loan

This is the most important step in this process, because your loan choice will determine the success of the strategy. The type of auto loan you can get depends on your current financial situation, especially your credit. There are four choices for vehicle financing: bank, credit union, finance company and dealership.

Many people assume that with poor credit, their options are limited to dealer financing or a subprime finance company (one specializing in consumers with poor credit). However, Charles Bernath, an Atlanta, GA tax and credit expert, says that’s incorrect. “Usually, you can go to a credit union, so check out that option first,” he suggests. Bernath also states, “Only dealers and subprime financing companies benefit from their loans.” Therefore, if you can avoid them and their typically double-digit finance rates, do so.

Michael A. Wishnow, Senior Vice President of Marketing & Communications for the Pennsylvania Credit Union Association, agrees. Actually, he says, “If you have a FICO score of 600 or better, you can probably get a car loan at most credit unions at single-digit interest rates.” He adds, “However, roughly only 50% of credit unions will write loans for people with FICO scores below 600.”

Banks, while more stringent than credit unions, are still better than dealer and subprime financing. But, says Jason Jewett, Personal Banker and AVP at SunTrust Bank in Laurel Springs, GA, “You’ll need a minimum credit score of 660 and clean credit report to get financed at most banks, and your finance rate depends on your credit score and history.”

Whatever your choice, do not borrow more than you can afford. Your monthly payment should fit your financial reality. So, while you may want that dream car, your vehicle is collateral for your loan. If you can’t pay your car note, you may lose the car and further damage your credit.

In fact, says consumer credit expert and author, Beverly Harzog, “Decide before you go car shopping exactly how much you'll spend, which might keep you from making an impulsive decision and financing a car that you can’t really afford.”

And, remember, the lower your FICO score, the less you’ll be lent to begin with. “With low credit scores, you should focus on a used vehicle and expect to be financed a maximum 80% of its Kelly Blue Book value,” advises Wishnow. 

Your choice of a loan type and amount, therefore, is critical to the success of this strategy.

2. Repaying Your Auto Loan

This is the most important and straightforward aspect of this credit restoration strategy. That’s because when you get an installment loan to rebuild your credit, naturally, you must pay it back. Harzog, whose latest book is The Debt Escape Plan: How to Free Yourself From Credit Card Balances, Boost Your Credit Score, and Live Debt-Free, emphasizes that “It’s critically important to make your car loan payment on time each month.” Even a single late payment can set back your credit rebuilding strategy.

Repaying your loan on time, for at least nine months to a year, will help increase your credit score. But, you’ll also have to pay all of your other bills on time, have the right mix of credit, and not have too much debt. You must manage all of your credit well. Otherwise, this strategy won’t help, and may even hurt, your credit.

3. Refinancing Your Auto Loan

“Sometimes,” says Wishnow, “your payment is affordable, but your interest rate far too high.” This is most often true if you quickly financed a vehicle because you must have one or felt forced to accept a high interest loan because of your credit. Bernath, who has refinanced all three of his daughters’ auto loans, says, “You should refinance your vehicle loan when that happens.”

And, in most cases, while you’ll need to take specific steps, you can refinance much sooner than you think. If you got a double-digit interest loan through dealer or other subprime financing, you’ll want to refinance that loan as soon as you can.

Often, if your credit score is above 600, you can go to a credit union and refinance your loan, even if it’s immediately after getting into the bad loan. But, Wishnow says, you’ll have to become a member of a credit union.

Jewett explains that if you’ve used this approach to successfully rebuild your credit and have no negative entries on your credit report, “Once your score is at 660, you can use a bank to refinance your auto loan.”

All three credit experts agree that refinancing is both a great way to reduce the amount you pay over the loan’s life and also to reduce your monthly payment, in most cases. So, pursue that as part of this plan.

If you apply all three of these steps carefully, using an auto loan to rebuild your credit is one of your fastest and best paths to boosting your FICO score.

What is a Subprime Car Loan?


"Subprime" doesn't have to be a dirty word when it comes to taking out a car loan to buy a new or used car.

In a perfect world, everyone benefits from low interest rates on car loans. But for a large swath of the population, that's not an option. Blame it on the effects on your finances of the Great Recession of 2008 or missteps in managing your money. Either way, a subprime credit score is not unusual.

"About 20 percent of all auto loans currently are subprime or deep subprime," says Rick Finch, vice president and general manager at LendingTree Auto Division. "Subprime loans are growing, and auto is the fastest segment."

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Typically, you're considered a subprime borrower if you have a credit score of 619 or lower, Finch says. That doesn't preclude you from purchasing a car, but it will cost more because you're a greater risk in the eyes of the lender.

While everyone has considerations to take into account when buying a car, subprime borrowers have to know a little more. From understanding the ultimate cost of the vehicle to knowing your ability to meet your payments, here's a look at five things to ponder before taking out a subprime car loan.

Many car buyers go to the dealer with a monthly payment in mind and give little thought to what the ultimate cost of the car will be. As a result, the car buyer gets his or her $300-a-month payment, but that could mean a five-year loan may morph into a seven-year one.

"The longer the loan, the more interest you are paying, especially if you are buying a used car," says Chris Kukla, senior counsel at the Center for Responsible Lending. "Let's say you buy a 5-year-old car and slap a seven-year loan on that. Assuming your car can hold up 11 to 12 years, you'll still end up owing money on the car."

Knowing how much you can afford each month is prudent, but you also must figure out the interest you'll pay over the life of the car loan and any fees associated with borrowing money to determine if it's worth it. You don't want to end up in a situation where the $30,000 car ends up costing you $40,000.

"People get in trouble when they focus more on the monthly payment versus what's the total cost of ownership, including repairs, insurance and gas," says Finch of LendingTree Autos.

The phrase "It's all in the fine print" is particularly true when it comes to subprime car loans. After all, you are a risk and the lender is going to protect itself, usually by charging you more in fees. But the discrepancies between those fees can be great from one dealer to the next, which is why you need to know what you are signing.

"You need to be diligent in reading all the fine print and understanding what types of fees you are going to incur," says Eric Lyman, vice president of industry insight at ALG, the automobile industry research company. "There are various ways that lenders get compensation for their risk."

One common fee that lenders charge is a loan origination fee, but what one dealer charges can vary greatly from the next. "One lender's origination fee might be $500 while another might be $1,500 for the same car," he says.

Lyman says combing over all the details of a car loan will ensure that you won't be surprised by any unforeseen costs. What's more, knowing the fees ahead of time will put you in a better position when you are negotiating the purchase price and auto loan terms

Everyone needs a mode of transportation. But before borrowing money, borrowers with credit problems need to think about the ramifications of not paying back an auto loan. After all, you don't want to end up in a worse credit situation because you can't afford your ride.

"When borrowing money, you need to make a realistic assessment of yourself and your capabilities," says Lawrence White, professor of economics at New York University Stern School of Business. "You need to think longer term rather than, 'I need this today and will worry about it tomorrow.'"

Industry experts say that while a BMW may be an appealing vehicle for your commute, your credit history and current household finances may make it more prudent to go with a lower-cost sedan.

"Just because it's a subprime car loan doesn't mean you shouldn't do it," says White. It's more about how much you need the car, did you get a good price on the car and can you afford to pay back the loan, he says.

If you have a credit score over 680, chances are you'll have auto lenders banging at your door to offer you low-interest car loans. Have a score below that and there may be no one calling.

"If you are a consumer with credit challenges, whether that's because you don't have a lot of credit history or missed payments, you have more work to do," says Kukla of the Center for Responsible Lending. "If you have a score below 680, the number of lenders willing to give you a loan decreases pretty rapidly."

While prime borrowers can easily get a low-interest auto loan from the bank down the street, Kukla says consumers with bad credit only have a couple of options: They can turn to the Internet or rely on a dealer.

If the dealer route is under consideration, know that it can be costly.

"One of the biggest misconceptions we see out there perpetuated by dealers is that they do business with dozens of lenders," Kukla says. "Nothing could be farther from the truth. The dealer is looking for the best loan for them, not the consumer."

When it comes to borrowing money when you have bad credit, you have to be able to take rejection. That's because you are likely to be turned down multiple times before you find a lender who will give you the money. On the other hand, you also don't want to assume the lender or bank will say no just because you have credit challenges without giving it a try.

Kukla says he hears plenty of stories of consumers who assumed a bank or credit union wouldn't give them financing only to learn later that they could have gotten it, and gotten it much cheaper, if they had asked.

"Never assume you can't get credit," Kukla says. "The worst thing you will hear is the word 'no.'"


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Read more: http://www.bankrate.com/finance/auto/subprime-car-loans-questions-to-ask-1.aspx#ixzz4PRMCCPBa 
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Top 5 Reasons To Buy From a Dealership


Top 5 Reasons You Should Buy From a  Dealership

#5: Choice

Dealers often have a big selection of late model cars to let you test drive. They get lots of high quality low mileage cars from folks who are trading up or turning in their leased vehicles. These cars are usually very well maintained.

#4: Protection

Most dealers offer extended warranties and vehicle service plans, which can provide some peace of mind when you buy. You can add to the value of your purchase by negotiating a discount on warranty coverage or service.

#3: Convenience

If you’re looking for one-stop car shopping, buying from a dealership is the way to go. Dealers typically take care of all the necessary paperwork, and most have efficient financing departments that can help you secure a car loan. They know the sales tax rules and will help you with the vehicle registration and the ordering of your new license plates.

#2: The CARFAX Advantage

You’ll have more peace of mind if you buy from people you know in the community who have more at stake than just moving cars. Look for Carfax Advantage Dealers and you’ll get the additional benefit of knowing that those dealers provide free Carfax Vehicle History Reports.

#1: Dependability

Dealers view everyone who comes into their dealership as potentially a customer for the long haul. They like to build relationships by providing great customer service, quality repair service and giving you the confidence that they will be there when you need them.


How do I choose the right Vehicle?


There are many things to consider before purchasing a vehicle.  The first is identifying what type of vehicle fits your specific needs.  Metro Motors KC sales Used Cars and Trucks of all types.  We carry everything from coupes to full size SUVs.  Below are a few things to consider before making a buying decision. 

Identify My Needs

How many passengers do I need accommodate?

What type of driving conditions define your daily routine: highway, city streets, off-road?

Will you be driving in the rain, ice, snow, or mud?

Do you have a long commute? Is gas mileage important to you?

Will you need to tow with your new vehicle?

What safety features are most important to you?

What are your cargo needs?

Will you be using car seats?

Establish Your Budget

There are several ways to purchase a vehicle.  Metro Motors KC provides many ways to pay for your new vehicle.  We provide the most competitive finance options to all credit profiles, accept cash payments, bank checks, and buy here pay here.  We have relationships with many prime and sub-prime lenders in the Midwest region.  We can help finance Bad Credit Car Loans. Guaranteed credit approval!  Below are some important points to keep in mind.

Most banks allow up to 15% of your gross or total monthly income to be used towards a monthly car payment.

Every $1,000 you finance is typically between $20-$35 per month (Can vary considerably based upon credit and vehicle)



Where Is The Best Place To Shop For My New Vehicle











The traditional ways of shopping for a pre-owned vehicle are a thing of the past.  Years ago you had to visit a dealership to obtain the information needed to make a good purchasing decision.  With a little help from the internet, you can now search for literally any vehicle/make/model/trim you desire at the click of a mouse.  Not only can you find the car you desire, you can perform your market research to assure you’re getting the best deal.  Below are a few examples of places you can shop for your new vehicle!

www.cars.com

www.autotrader.com

www.cargurus.com

Metro Motors KC takes pride in pricing our vehicles with the market instead of the classic mark up from cost approach.   We spend the time researching and purchasing quality vehicles at the right prices so we can provide you with a quality vehicle at the perfect price. 



How Can I Pay For My Car?

Metro Motors KC provides many options to purchase your new vehicle.  We specialize in obtaining the very best terms available for our customers no matter their credit situation. 

Used Car Financing - We provide many financing options that give our customers the flexibility and freedom to choose the program that best fit their needs.  We specialize in helping our customers find the bank that offers the best terms based upon the vehicle of interest and credit profile.  Metro Motors KC has established excellent relationships with many lenders over the 20 years of combine experience that we bring. 

Sub-Prime Financing - We offer multiple programs to those who have less than perfect credit. That's right, we can still help you find the car of your dreams!  We understand that life happens and sometimes we aren't in control of all factors affecting our credit.  That's why we have formed exclusive relationships with our sub-prime lenders, which allow us to provide the best options available for re-establishing your credit. 

Buy Here Pay Here - Metro Motors KC carries specific inventory that allows our customers that may not be able to provide proof of income, other verification need by most banks, or currently unemployed. 

Cash Payments - It may come as no surprise, we accept cash payments!

Bank Check - Bank or cashier’s checks are accepted as a form of payment at Metro Motors KC.

Good Credit, Bad Credit Car Loans, No Credit Car Loans, or Buy Here Pay Here.  We do it all!

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