Many Options for Credit! We Use
Greylock Federal Credit Union
Adams Community Savings Bank
Credit Acceptance Corporation:No Credit, Bad Credit = No Problem!-------------------------------------------------
Is Sub-Prime Credit A Wise Choice?
Sub-Prime Credit should always be your last choice. Sometimes, you must meet the facts that your credit is not good, and that in the past you have made some decisions that have effected you negatively. In some cases banks or lending institutions will lend you money for a car at a higher interest rate than than say their best borrowers. Typically, this can be 4 or 5 percentage points above their best deal. People who have superior credit (as of rates in effect in February 2016) can obtain credit as low as 2.9% or lower, and those with a few acceptable issues as high as 6.99% to perhaps 8.9%. Non-traditional lenders can go to 14.99% to 20.99% If you are in the growing number of people, for whatever reason, that NEED sub-prime lending, know that you will pay as much as 20.99% in many cases. There may be fees too that all lenders include. You need to ask questions in all credit settings – make sure you know what is expected. Make sure that your lender goes over the paperwork with you, shows you Rate, Term, Amount Borrowed, Amount Financed, Trade-In Value, Cost of Vehicle and so on.
We Won't Judge You! We will always listen to your credit issue, not judge you, and help you source your loan. If we all feel that you just might have that chance for a traditional car loan, we'll source your application with either Greylock Federal Credit Union, or Adams Community Bank... or both - you decide! We will encourage you to also speak with your own banker. If your credit isn't good, for whatever reason, we will source your application to Credit Acceptance Corp. Credit Acceptance will give you a positive credit rating if you pay your account on time. This could help your credit worthiness if you also try and resolve issues on your credit report, or if these issues drop off your credit report over time. Do you have time to wait to fix your credit? No! If you did you would not be using sub-prime credit. If you go this route, you are doing it to not only get credit, but to fix your credit! Avoid expensive fees and bad credit reports once on the program. Pay on time, or early, and pay more if you can to pay down your balance quicker. Try not to focus on some future big money coming in and you'll 'pay it off' - pay extra every month and save on interest that way, and if your big money comes in, then pay it down as planned if you still can. Reducing debt is always a good strategy.
You Cannot Be Required To Buy A Service Contract! If you do not want one, you do not have to buy one. Does it make sense? It may or may not depending on your level of confidence in the vehicle, its actual ability to meet your expectations, pricing, and your budget. Frankly, they make sense for some but not for all. Remember, you have grouped the costs of the car purchase with the purchase price of the service contract. In many cases, you will be upside down in your loan, where the value of the vehicle does not match the value owed on the loan. In other words, with all things being equal, if you sold the car outright for market value, you'd still owe on the loan. Depending on many factors, it might take many months into the loan before the value of the car meets or exceeds the value of your loan balance. Be prepared to hang on to your car.
GAP (Guaranteed Asset Protection)
Gap Insurance Is ALWAYS Recommended
GAP Insurance is not required. (Credit Acceptance does not currently offer it in Massachusetts.) It is advisable to ask your own Insurance Carrier what the costs and coverages are for GAP insurance. It may or may not be helpful with your loan should the value of your vehicle and or any money owed on a finance Service Contract or other mitigating financial factors that reduce what they will pay to your lender. In a high interest loan, you will be paying a great deal of money for the interest, and that means that your loan is paid off slower in principal reduction. Thus, your vehicle may lose its value faster than you are able to pay down your debt. You are STILL LIABLE for the balance of the loan because YOU and the Lender agreed to this by the very nature of the contract. The Lender has agreed to extend you money at a higher rate, and above the vehicle's equity value. This situation is often termed by the media and public as “Upside Down" in your loan. It can be a problem when you have a loss on the vehicle early on in the contract with an accident or a catastrophic mechanical failure – because despite these events – you are responsible for the full contract. Thus, consider the cost and coverage of a GAP policy when you speak with your insurance agent.
You may be from the beginning of your loan in a negative equity situation meaning that you owe more than the car us worth! This is called, “Being Upside Down' in your loan.
Why? 1.) Because you may have made only a small down payment, 2.) You are financing the Sales Tax, Registration, Title Fee, Documentation Fee, and Inspection Fees on top of the price. 3.) The price of the vehicle, 4.) The Interest Rate. Higher interest rates will make it difficult to reduce your principal balance. In other words, most of your money in payments goes toward interest, and slowly reduces principal (what you owe the lender), 5.) Late Fees, increased interest, any fees that have been applied per the contract.
GAP Insurance may be able to help you pay off what you owe on your loan above and beyond what the car is worth. GAP Insurance is always recommended, so contact your insurance provider to see if they carry it or if you qualify for it, or even need it. Credit Acceptance does not currently offer it in Massachusetts. As always, shop for this insurance as prices may vary..
General Things To Remember:1.) Question yourself: "Do I really need this car, or would a less exspensive vehicle be better? Should I just fix my current car?" If you want to lessen the impact of high interest, being “Upside Down” (the current value of your vehicle is lower than the current value of your loan debt) for whatever reason, Pay Extra On Your Loan, or Pay It Off Early! Credit Acceptance offers real credit, and it can better your credit score and history if used correctly. If you pay late or not enough, that could lead to negative results on your history and score. Generally speaking, it is usually a wise idea to pay more and sooner on a high interest loan. 2.) You just can't stop paying on the loan even if the vehicle is inoperable for any reason, unless where allowed by law. Thus, if your engine stops and not under warranty – you Owe The Balance of the contract. You Cannot Just Stop Paying. 3.) You cannot just return the vehicle to the Dealer or the Lender. Once you sign, you are obligated. 4.) Your attorney is an expert. Always seek legal advice before entering any contract.
You Make Your Own Informed Choices. Take some time to think over the cost of the money and the cost of the car. It's 'your' credit circumstances, and 'your' credit issues that need resolving, or you will continue to have financial issues throughout your life. Not having low cost interest programs available controls your life with great negatively. Different institutions exist in a marketplace that has inexpensive solutions and costly ones. We will try and work with you towards your goal of a used vehicle. We understand that in the Northern Berkshires, life without a car is next to impossible. Call Us at 413-743-2625 or 413-446-3857