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Getting a new vehicle without a loan or lease is quite uncommon nowadays. Most often, the lender holds a lien on the car or truck until it has been paid off. You’ll be expected to carry comprehensive insurance during this period, so that you’ll have the funds to pay off the vehicle in the event of an accident. Normally, it’s smart to put together your finance package in advance.

This is particularly useful for people with bad credit, as a variety of dealers and lenders will review your application, a number of of which are experts in bad credit lending scenarios.

Auto Finance Rates in Florence

Below you’ll find rates you can expect at different credit tiers. These aren’t to be viewed as advertisements. Variables that affect your precise interest rate include:

  • Credit Profile
  • City of Residence
  • History of Auto Loan/Lease Payment
  • Monthly Income
  • Loan Amount
  • Length of Loan: 2-7 Years
FICO Rating New Car Used Car
Excellent 3.0% 3.4%
Good 4.3% 4.9%
Average 6.0% 7.3%
Subprime 8.7% 9.8%
Bad 13.5% 14.3%
Very Bad 14.0% 16.0%

Used Auto Loans in Florence

Some people shy away from used cars because they involve higher interest financing. However, used cars are more affordable in the end, and they require smaller down payments. Check out the chart below, which illustrates the costs of car loans for new versus pre-owned cars and trucks.

Age Price APR Months Payment Interest Total Cost
New $30,750 6.00% 60 $594.48 $4,919 $35,669
1 Year $24,600 7.50% 60 $492.93 $4,976 $29,576
2 Years $20,910 7.50% 60 $418.99 $4,230 $25,140
3 Years $17,774 7.50% 60 $356.14 $3,595 $21,369

Most cars a chunk of their value each and every year, so you can obtain a low-mileage used car for thousands less than a brand new one. Generally, you can get a car loan for a car that’s up to a decade old. Mileage limitations often apply.

Bad Credit Auto Loans in Florence

Do you have a credit score that’s 620 or lower? Few things are more embarrassing than being declined by the dealership. A couple of decades ago, loan companies were few who would provide auto loans for those with subprime credit. Now many loan providers, as well as some banks, have subprime finance teams.

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It may seem like a buy here pay here dealer is the quickest solution. A lot of these dealerships don’t inspect your credit, and they offer inexpensive higher-mileage vehicles. The disadvantages are significant: extortionate interest rates and various stipulations. Invariably, it’s safer to go to a local bank or finance company. The rates are typically lower, the terms improved, and you have the ability to re-establish your credit in the process.

Go here to apply online.

Decreasing Your Rate of Interest

If you’d like to limit your rate of interest, you’ve got a number of options. A lot of individuals have errors on their credit reports. These types of inaccuracies could be hurting your credit score without you realizing it. Fortunately, it’s free to check your credit report once a year at www.AnnualCreditReport.com.

Florence has a number of credit improvement companies that can help you fix these types of mistakes, or you can file the paperwork on your own. Other things that might minimize your rate of interest:

  • Having a cosigner.
  • Furnishing a bigger down payment.
  • Financing a brand new vehicle.

Can a Car Loan Improve Your Credit?

If you want to improve your credit score, a car loan could actually help–assuming that you pay it off as scheduled. Your FICO score isn’t going to spike the moment you pay off the vehicle. Rather, it progressively improves as you make your payments year after year. It’s a good idea to enroll in automatic payments, to ensure you won’t miss any monthly payments.

Florence Resources

Credit Unions

Credit UnionLocationZip CodePhone
Alabama Central1902 Bruin Dr35630(256) 766-9198
Florence1505 N Pine St35630(256) 767-4700
Florence501 E Tennessee St35630(256) 766-7264
Lauderdale County Teachers103 Mangum St35630(256) 766-2936
Listerhill Employee'S3701 Cloverdale Rd35633(256) 718-0730
Listerhill Employee'S301 W College St35630(256) 766-7225
Listerhill Employee'S2995 Hough Rd35630(256) 767-3171
Tva1010 Muscle Shoals Dr35630(256) 386-3000
Tva406 N Mall Rd35630(256) 246-0350
Tva303 E Dr Hicks Blvd35630(256) 246-2994