If you have a poor credit score, you might be worried that you won’t be able to buy a newer car and instead will be stuck with an old junker vehicle. However, this is not the case for most buyers! Believe it or not, most bad credit auto lenders like newer cars. In fact, the newer car is sometimes easier to get a bad credit buyer to finance than an older one. Here are some of the reasons why checking out the newer vehicles is actually a good idea!
Newer cars can be easier to get financed
Pretend you are the bank and are loaning out a large sum of money to a potential car buyer. Would you rather have the buyer purchase a ten year old vehicle for $10,000 on a five year loan, or a three year old vehicle for $15,000 on a five year loan? If you said the three year old vehicle, that is the right choice. The lender likes loaning money on newer vehicles because they have a greater chance of staying on the road and avoiding major breakdowns. For example, if they do the loan on the ten year old car and the transmission goes out, they could be in trouble if the buyer decides it isn’t worth fixing and stops making their payment. For this reason, the newer car is the smarter choice for the lender.
Newer cars mean less risk for the lender
From the lender’s point of view, they want to make money on the auto loan and not to lose money. Obviously, the lender makes some money on most car loans or else they wouldn’t do it in the first place. When deciding to make a loan it all comes down to how much risk is involved, this is mainly determined by how trustworthy the buyer is to make their payments (gauged by their credit score) and by the value of the vehicle they are buying. If for some reason the bank makes a poor decision on who they make a loan to, they will have to take the vehicle back. The lender is in better shape taking back a newer car than an older one since it probably is worth more money and less likely to have had major mechanical problems.
Find a newer vehicle to purchase with bad credit
If you are asking yourself where a good place to purchase a newer car with bad credit is, you are in luck! At Washington Auto Credit we have an excellent reputation of getting people auto financing with minimal requirements. We also have an impressive selection of newer used vehicles to choose from. Come see us today in the Olympia Auto Mall!