Tips on Buying Cars: First time buyer/Troubled Credit, first time buyer, proof of income

Question
I am 23 yr old first time buyer. My credit is poor and have been getting my wages garnished and am 2 weeks from being done with that. I make good money and have a steady income. Where should i start? I have applied for loans and have been denied for the amount that I want for the car i want. Is there a certain vehicle i should be looking for at a certain price? I can only have payment between $200-$300. But i cant seem to get the car i want at the Apr i can afford! I need some direction and advice! Please help!

Answer
Bayarea,

Thanks for your question.  This is a common problem that most younger people have such as yourself.  Credit is an important thing, but everyone has some bumps and bruises along the way, especially while they are young.  The good thing is that you are young enough that you can correct it now with on time payments.  Almost anyone can get an auto loan, even with bad credit.  You just have to set your sights on the right loan, the right dealership, and the vehicle.  The APR is going to be high no matter what vehicle you look at.  Your best bet is to get into an entry level NEW vehicle at a major dealership.  Entry level vehicle being one of their less expensive units that they sell.  They best way to do this is go to a dealership where they advertise bad credit ok.  Go to that dealership, but be armed.  You are going to have to put money down.  A good commitment for the price range that you are looking for is somewhere in the neighborhood of $2000 to $3000 down.  This will help them with the bank to get the deal done.  When you have poor credit, and are a first time buyer, you have to come to the table with some commitment as the bank calls it.  That being down payment in our terms.  Make sure that you bring all of your stipulations to the dealership with you that the bank will require.  Those will be Proof of Income - Your most recent paystub, Proof of Residence - A BILL going to your address in your name, and 5 complete references with names, addresses, and phone numbers to people that do not live in the same household as yourself.  

You may have to settle for a different vehicle than the one that you want for the next 12 months or so.  Think of it as crawling before you walk.  If you can establish that you can make on time payment on this vehicle for the next 12 months, then you can go and trade the vehicle in and get what you want, but you are going to have to start somewhere.

I hope this helps, and I hope that you find a dealership that can help you out.  Let me know if you need anything else.

Thanks -


Jeremy Beck