Is this a real crisis? Is this cause for concern? Yes, but there is light at the end of the tunnel. We need to take a look at what caused the problem and why it is so important to get out the right way.
The houseing and Mortgage crisis has gained media attention because of the election, but what about the car loan crisis? I believe the Auto Industry and its problems are closely related to the Home Mortgage Crisis. I use the word Crisis because this is the word used in the media.
The Auto Lenders are having the same problems as other banks. They have limited reserves to loan money to buy a car, so are now being very selective on who they give a loan. In the past, it has been very easy for someone to walk into a dealership and drive away 30 minutes later with a $40,000 car. Before the "Crisis", you could have a 620 Equifax or Transunion, and you were pretty much ready to go!
Now, lenders are actually looking at length of Employment, Residence, Previous Address, Employment, Income, Stability, Past Loans, and most importantly; Proof Of These items! This may not be a bad idea because bad loans cost all of us money.
Things to remember and consider when going to buy a car.
1. Take proof of your employment like a check stub to show how much you make.
2. Take an Electric bill and phone bill to show proof of residence.
3. Make sure you have some references in case you need them.
4. Most important--Pay some Money Down--even if a small amount! Banks want some type of initial investment from the customer because these loans are less likely to go bad historically.
5. If you have a job that you get paid cash--see if the dealer can use bank statements showing regular weekly or bi-weekly deposits.
6. Remember there is an Auto Loan For Any Credit
7. If you are a New Car Buyer, now is the time to make sure you are getting the best price possible. Get A Quote. Quick.
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