Adding a Cosigner to Your Auto Loan

Many bad credit borrowers ask someone to cosign their car loan. We explore what a cosigner does to help increase your chances of approval, and how it works.

Adding a Cosigner to Your Auto Loan

Having a cosigner is a great way to increase your chances of auto loan approval if your credit score is less than perfect. A cosigner lends you their good credit score and can often help you qualify for better loan terms if you are approved.

A cosigner can really be anyone, as long as they have a good credit score and they meet the lender’s income requirements. Typically, borrowers ask friends or family members to cosign a car loan. If you ask a spouse to cosign for you, they become a co-borrower, instead.

A cosigner simply helps the primary borrower get approved for a loan by offering additional security to the lender by promising to make the payments if the primary borrower cannot. They sign the loan contract with you, but do not get any rights to the vehicle.

While they agree to pay the loan in the event that you’re unable to, they aren’t there to help you make payments each month. You still need to meet the lender’s income requirements, and you cannot add a cosigner’s income to yours to meet the lender’s standards.

Risks for the Cosigner

Before you ask someone to sign an auto loan contract with you, let them know the risks involved. The biggest risk that comes with being a cosigner is the possible negative impact on their good credit score.

If you start to miss payments, it not only harms your credit score but also the cosigner’s. Additionally, the lender can go after the cosigner for payments if you start slipping. If you default, it can remain on your and your cosigner’s credit reports for up to seven years. A default, and the repossession that usually follows, can really hurt your chances of getting approved for new credit in the future, and can drastically lower both of your credit scores.

While missed payments can hurt both your scores, on-time payments can improve them. Since your cosigner risked their good credit to help you get approved for the loan, be sure to stay in contact with them throughout the loan and assure them that their credit is in good hands!

A cosigner also can not back out of a car loan once the contract is signed. If your credit score has improved since the start of the loan and you want to remove them, you can refinance the auto loan to remove them from the loan. Refinancing is the only way to remove a cosigner.

Finding a Dealership to Work With

Whether or not you find a cosigner, getting a car loan with bad credit can be difficult. Many traditional auto lenders may take one look at your credit score and turn you away – thankfully, there are bad credit car lenders that can help.

Subprime lenders use more than a borrower’s credit score to make their loan decision and know that people are more than what appears on their credit reports. If you’re struggling to find a lender that’s willing to work within your unique credit situation, start with us at

We match borrowers to dealerships with special finance departments with bad credit auto loan options. With a subprime lender, you may be able to get approved for a car loan without a cosigner if you meet their requirements. To get started, simply complete our free online application  and we’ll look for a dealer in your area that works with subprime lenders.

Will a Dealership Finance Me With Bad Credit?

If you cannot get approved through standard financing, you may be able to finance through a dealership that works with subprime lenders – if you can meet their conditions. Things can get tricky, however, because the requirements of these lenders are different than traditional lenders. Here is what you need to know.

How Dealership Special Finance Departments Work

Some dealerships have special finance departments that work with subprime, or bad credit, lenders. Subprime lenders use more than a credit score to determine your eligibility for a loan.

Bad credit lenders evaluate your income, job and residence stability, past payment history, and much more to determine if you qualify and how much car you can afford, based on your credit score, credit history, and the information you provide them.

If approved, they send the dealer a payment call, which is the maximum monthly loan payment you are approved for. From there, you choose a vehicle from the dealership’s inventory that fits within that budget.

Once you have chosen a car, you finalize the rest of the paperwork with the dealer. You can then purchase additional services or coverage, such as GAP insurance or extended warranties, if you want.

To be considered for subprime financing, there are also some documents you need to put together.

Requirements for a Bad Credit Auto Loan

With a bad credit lender, you must meet their requirements before you’re considered for auto loan approval. Some common documents you must provide include:

  • Driver’s license – Must be valid (not revoked, suspended, or expired) with your current address.
  • Proof of income – Subprime lenders typically require a monthly minimum income of anywhere from $1,500 to $2,000, pre-tax. This income must be proven with computer-generated check stubs that show year-to-date income.
  • Proof of residence – This can be proven with a recent utility bill, in your name, with your current address.
  • Proof of a working phone – A working cell or landline phone in your name, proven with a recent phone bill. Prepaid phones usually aren’t accepted.
  • Down payment Bad credit auto loans require a down payment, typically of at least 10% of the vehicle’s selling price, or $1,000, whichever is less. Equity from a trade-in can contribute to this down payment requirement as well.
  • Personal references – Lenders typically require a list of between five to eight personal references of family members, friends, or coworkers, with their complete contact information. None of these references can be someone living at the same address as you.

Since all subprime lenders are different, the listed requirements are general guidelines of what to expect in terms of income and the number of personal references. It’s also possible for some lenders to require more or fewer qualifications.

Additional items may be required based on your own situation. For example, if you were recently discharged from a bankruptcy, you need to bring your discharge papers and, possibly, other paperwork.

The hardest for many bad credit borrowers to meet is the down payment requirement – but it is really in your best interest to put down as much as you can reasonably afford. The more money you put down, the less you spend on interest charges during the loan term, and the smaller your monthly loan payment. If you have a trade-in with equity, it can add to your down payment, and possibly cover all of it.

Where Do I Find Subprime Lenders?

Subprime lending is more readily available than ever. But if you want to take the hassle out of finding a dealership that offers special financing, we want to help with that. At, we’ve teamed up with dealers all over the country that have subprime lending options.

You simply fill out our secure auto loan request form, and we get to work finding a dealership in your local area. The form is completely free (yes, free!), and takes only a few minutes to complete. To get started, click here!

Should You Use Your Coronavirus Stimulus Check as a Down Payment on an Auto Loan?

When you’re struggling with credit issues and you need a vehicle, a down payment increases your chances of getting approved by a subprime lender. With that in mind, the corona-virus stimulus checks that are rolling out may be able to help you get into your next car loan.

Who Gets a Stimulus Check?

During the corona-virus pandemic, many Americans have been affected not only by the virus and the disease it causes, but by the temporary loss of their jobs. Due to the economic stress that this pandemic and shelter-in-place orders enacted by many states have caused, the U.S. government made the decision that Americans who qualify should receive a stimulus check.

The most an individual can be given is $1,200 if their adjusted gross income (AGI) is below $75,000. Married couples, if their combined AGI is less than $150,000, receive a maximum of $2,400. Those who qualify with any dependents under 17 receive $500 per child.

You can also consult the IRS’ website ( to get all of the specifics.

If you filed your 2018 or 2019 tax returns with direct deposit for the refund, and qualify for the economic impact payment, your stimulus check should simply be deposited directly in your bank account. If you don’t have direct deposit set up, your check is mailed to you.

You also don’t need to apply for the stimulus check. Simply being an American citizen with a Social Security number, who meets the income requirements, is all it takes.

If you’re financially stable during these tough times, this stimulus check could help cover all or part of the down payment requirement for a bad credit auto loan.

Bad Credit Car Loan Down Payment Requirements

When you work with a subprime lender, you’re typically expected to have a down payment of at least $1,000 or 10% of the vehicle’s selling price, sometimes whichever is less. The down payment doesn’t have to be only cash. You can also use a trade-in with equity to help cover the down payment – or use both!

For many borrowers in all credit situations, saving for a down payment is one of the toughest requirements to meet. Proving your identity, providing your check stubs, and proving where you live is fairly painless, but coming up with at least $1,000 in cash can be difficult.

However, these stimulus checks that have been approved and sent to many Americans don’t have to be used for anything specific. This means you can use this cash to put toward a down payment on a car loan and meet one of the biggest requirements of subprime lenders.

Other Common Bad Credit Auto Loan Requirements

Having a down payment isn’t the only requirement of most bad credit auto lenders. Here are the other most common stipulations you’re likely to meet:

  • Income – Subprime lenders generally require a borrower’s minimum monthly income to be at least $1,500 to $2,000 before taxes. This can be proven with a recent computer-generated check stub with year-to-date income listed. Unemployment checks can’t be used.
  • Residence – Typically, subprime lenders prefer a borrower with a stable residence history, meaning you’ve lived in the same area for a year or more. You can prove where you live with a recent utility bill or bank statement in your name.
  • Working phone – Bad credit borrowers also need to have a working cell phone or landline phone in their name, proven with a recent phone bill. Prepaid cell phones usually aren’t accepted.
  • Identity – Proven with a valid driver’s license, with your current address listed.

These are the most commonly requested items. Just keep in mind that your lender may require more documents, depending on your personal situation, and that all lenders vary in what exactly they need.

Finding a Bad Credit Lender

Meeting the down payment requirement can be one of the biggest hurdles for any borrower looking to qualify for their next car loan, but the stimulus check can be your solution. If you have less than perfect credit, finding a bad credit auto lender may be even harder – but we want to help with that.

At, we’re teamed up with dealerships that work with subprime lenders through their special finance departments. We’re still working hard to connect credit-challenged borrowers to bad credit lenders, and we’re still doing it for free. To get started, simply complete our car loan request form and we’ll look for a dealer in your local area with bad credit auto loan options.

Leasing a Car vs. a Rent to Own Car

When someone says renting, you may think of a lease agreement. No wonder there’s confusion when it comes to the differences between car leasing and rent to own vehicles! They sound very similar – like they go hand in hand. We’re here to outline their differences.

Leasing a Car vs. a Rent to Own Car

While renting and leasing are often used interchangeably or alongside one another, these terms have very different meanings when it comes to auto financing.

One of the main differences between a lease and a rent to own car is the dealership where it’s offered. Leases are almost exclusively for new vehicles and available at traditional, franchised dealers. Rent to own cars are offered at dealerships with in-house financing, where the dealer is also the lender. Rent to own vehicles, also called lease to owns, are used cars.

How Leasing a Car Works

Traditional leasing is only available at franchised dealerships and is almost exclusively reserved for new vehicles. Typically, a lease’s monthly payments are more affordable than financing a new car with an auto loan, and leasing can be great for someone that wants to drive a brand-new vehicle every few years.

With a car lease, you pay the difference between the negotiated selling price and the value of the vehicle at the end of your lease term (also known as residual value). In other words, you’re paying only for that portion of the car you use while you’re driving it.

Once your lease is up, you return the vehicle to the dealer or leasing company. You don’t have any ownership rights to it since your name isn’t listed on the title. However, there’s usually the option to purchase the car at the end of the lease, while many leasing companies waive the termination fee if you turn it in for another leased vehicle. But you aren’t obligated to do either – you can simply pay any fees, turn it in, and walk away if you want. However, with a lease, you typically don’t gain any equity to put toward future purchases.

Keep in mind that new car leasing is generally only for borrowers with good to great credit scores. If your credit score is less than perfect, you may have issues getting approved for a new vehicle lease.

How Rent to Own Cars Work

With rent to own cars, you typically purchase the vehicle at the end of the rental agreement. The goal is to complete your rent payments so you can own the car. Similar to a traditional auto lease, your name isn’t listed on the title for the rent to own vehicle, unless you purchase it at the end of the rental period.

Only adding to the confusion, rent to own is sometimes called a lease to own. However, if you hear “to own” at the end, it’s likely for a used car at an in-house financing or buy here pay here (BHPH) dealership.

Rent to own agreements are often offered at BHPH dealers that only have used vehicles. These dealerships generally don’t check a borrower’s credit score during the approval process, which makes these kinds of dealers very appealing to borrowers struggling to get financed by a traditional lender.

While BHPH dealerships don’t normally check credit scores, they also may not report your rental agreement to the credit reporting agencies, either. Even if you make every payment on time, your credit score may not improve. If you decide to look for a rent to own car, be sure to ask the dealer if they report rentals and payments to the major credit bureaus if you want to help your credit score.

Some BHPH dealerships may also allow the renter to back out of the rent to own agreement, unlike a traditional lease. But this means you forfeit your down payment, all rent payments, and gain nothing at the end of the rent to own contract.

Additionally, with a rent to own vehicle, you may be expected to make weekly or biweekly payments at the dealership. Renting also may be more expensive than simply financing a car, and it’s often a last resort option for bad credit borrowers who need a vehicle right away.

Financing a Car With Bad Credit

Car leasing is typically for those with good credit scores, while a rent to own car may not improve your credit score and is typically more expensive than financing one. If you want a reliable used vehicle and a way to help your poor credit score, financing through a lender that offers bad credit auto loans could be for you.

Bad credit lenders, also called subprime lenders, work through a dealership’s special finance department to help bad credit borrowers get financed for their next car. These lenders report auto loans to the credit bureaus, so you can improve your credit score for future car loans or leasing opportunities with on-time payments.

At, we have connections with dealers that have special finance departments. We match borrowers with all types of unique credit situations to these dealerships for free. To get started, simply complete our auto loan request form and we’ll look for a dealer in your local area.

Are Dealerships still open during COVID-19?

The corona-virus, or COVID-19, situation is changing a lot of things about our daily lives. If you need to buy a car during this uncertain time, you’re probably wondering if dealerships are even open in your state. There are still dealers open for business if you know where to look, and we want to help.

Statewide Shelter in Place vs. Regional Shelter in Place

Almost all states have issued some type of shelter-in-place or stay-at-home order in an attempt to reduce the spread of COVID-19. These directives mandate that residents stay at home and limit movement to essential trips, and have closed businesses that aren’t deemed “essential.” In areas ordered to stay at home, essential services include things like grocery stores, pharmacies, banks, and some medical offices.

However, some places only have regional shelter-in-place orders in place, which differ from statewide directives.

Regional shelter-in-place or stay-at-home orders are typically put in place by the local government and only cover a certain area in a state. In most cases, these orders are put in place in the most populous or hardest hit areas of that state in an attempt to reduce the number of individuals exposed to corona-virus.

Statewide shelter-in-place or stay-at-home orders are issued by the state’s governor and put these restrictions in place across the entire state. As we mentioned above, there are currently 42 states under statewide shelter-in-place directives.

How Dealers Are Open Despite Shelter-in-Place Orders

The corona-virus situation has created a grey area for many dealerships. Some states have labeled dealers as essential businesses, while others have told them to stop selling cars but to keep service departments open.

Across much of the country, the result is that automakers and dealerships are finding creative ways to keep business going during this unprecedented time. Here’s a look at some of the unique ways dealers are helpings consumers buy vehicles:

Online car buying – Many dealerships are still open, although not physically. Instead, they’re providing all-digital selling processes that allow people to shop for a car and look at financing options completely online. Dealers are even going so far as to provide touch-less delivery.

Appointment only – Some dealerships that are allowed to remain open must conduct business by appointment only, to minimize person-to-person contact. These dealers are also typically required to institute upgraded cleaning measures inside their showrooms and customer areas.

Essential dealerships – In several states, dealerships have been deemed essential, and are able to remain open, though cautiously. This includes dealers in Georgia, Illinois, Maryland, Missouri, New York, North Carolina, Ohio, Texas, and more.

Car Buying and Corona-virus: Frequently Asked Questions (FAQs)

What is a shelter-in-place order?

A shelter-in-place order is proclaimed in the case of emergencies, and asks citizens to remain in their homes instead of seeking shelter in community emergency shelters. It’s an order for citizens to remain at home unless they’re acquiring essentials that are needed to sustain life. In the case of the COVID-19, it’s a way to help stop the spread of the corona-virus by limiting person-to-person exposure.

These orders have been enacted in the majority of states in the U.S., along with some regional shelter-in-places orders. A regional shelter-in-place means that select areas may have more stringent regulations and lock-down orders than the rest of the state.

What does this mean for dealerships?

This varies by state, but for many, this means that dealership service centers are still open. Since many workers have been deemed essential, such as healthcare workers and grocery store employees, dealership service centers in many states remain open to perform regular maintenance and vehicle repairs.

Even workers who haven’t been deemed essential still require their cars for trips to acquire essential items like food and medication, adding to the need for service centers to remain open.

Some states have allowed dealerships to keep their showrooms open, as well, while following the CDC’s recommendations of social distancing and sanitizing.

According to our research, there are dealerships that are selling vehicles and have their service centers open in some shelter-in-place states. At the same time, some dealerships may only be allowed to sell cars to customers by appointment, or sell vehicles online to avoid unnecessary exposure. A few dealerships are also offering curbside or drop-off selling/delivery options to customers.

Can I still complete a loan request form with

Yes, our auto loan request form is still available to those looking to get matched to dealerships with special finance departments. We help borrowers with less than perfect credit find those dealers that work with subprime lenders. We can match you to a dealership that, to the best of our knowledge, is still open in your area.

Get Connected to a Dealership Near You

The social distancing, quarantining, and stay-at-home and shelter-in-place orders that have come as a result of the corona-virus have created a temporary new normal. Despite dealership closures in some areas, is still working to match consumers to dealerships that are open in their local area.

We’re teamed up with a nationwide network of dealers, including those that know how to handle bad credit. It’s our mission to make the process of buying a vehicle faster and easier on consumers. If you need an auto loan at this time, we’re here to connect you with a dealer near you that’s open for business.

Our online auto loan request form is up and running, and you can complete it for free with zero-obligation. Get the process started right now,

Corona-virus and Car Buying

Even amid mandatory shutdown orders as a result of the corona-virus, some services have been deemed essential, and this means car dealerships are staying open in many areas. Even if the dealer you want to work with is under a temporary shutdown, there are several steps you can take now to make the car buying process go more quickly once you can safely travel to the dealership.

Corona-virus and Car Buying

As a bad credit borrower, there are several requirements you have to meet in order to qualify for financing through a subprime lender. If you’re at home riding out the corona-virus, or COVID-19, pandemic and you need an auto loan, there are four steps you can take from the comfort of your home:

1. Know Your Credit Situation

This is essential to getting the right deal when it comes to car buying. If you’re in a poor credit situation, you need to know where you stand so you can get ready to set up a budget and check the interest rate you might qualify for – before you head to a dealer. Taking this step may even keep you from falling in love with a vehicle you just can’t afford right now.

Getting your credit score and reports allows you to see what a lender sees and gives you the opportunity to see which areas of your credit you can improve on to make the most of your negotiating power when you visit a dealership. This simple step applies to normal car buying situations, as well as getting your best deal once the lock-down lifts.

To get a copy of your credit report from each of the three national credit bureaus, simply visit, where you’re allowed a free copy from each bureau – TransUnion, Experian, and Equifax – once every 12 months.

Finding out your credit score at the same time may result in a small fee. If you don’t want to or can’t pay, you can check out the free credit monitoring services available online.

2. Gather Your Documents

As a bad credit borrower, there are several documents you need to bring with you to the dealership in order to be considered for an auto loan. Let’s take a look:

  • Proof of income – Most subprime lenders require your most recent computer-generated paycheck stub showing year-to-date income, proving that you make at least $1,500 to $2,000 a month before taxes.
  • Proof of residence – This is proven with a recent utility bill or bank statement in your name, at the address listed on your application.
  • Proof of a working phone – Bring in your most recent phone bill from a landline or contract cell phone in your name. Prepaid phones don’t count.
  • A valid driver’s license – This serves as proof of identity.
  • A down payment – Usually a requirement for bad credit car loans, most lenders ask you to provide a down payment of at least $1,000 or 10% of a vehicle’s selling price.

The details vary by lender, so you may be asked for more or less paperwork than what we’ve listed. Additionally, most lenders require a list of five to eight personal references, complete with names, addresses, phone numbers, and email addresses.

3. Calculate Your Budget

When you need vehicle financing, putting together a budget is key. Not only do you have to meet the lender’s minimum income requirement, you also need to have enough available income to afford an auto loan. Lenders look at two calculations when they’re determining this: your debt to income (DTI) ratio and your payment to income (PTI) ratio. You can do this at home, as well.

The DTI ratio shows lenders how much of your income is already being used for your monthly bill payments, while the PTI ratio shows them how much of your monthly income is taken up by your car loan and insurance payment. Lenders need you to be able to afford both your loan payment as well as a full coverage auto insurance policy, which is required when you finance a car.

To calculate your DTI ratio, add up all your bills, including an estimated vehicle and insurance payment, and divide the total by your gross (pre-tax) monthly income. Lenders don’t typically consider you for a loan if you’re using more than 45% to 50% of your income for your current bills.

To see your PTI ratio, multiply your gross monthly income by 0.15, and then 0.20. Most lenders won’t approve your loan application if an estimated loan and insurance payment is more than 15% to 20% of your gross income. In fact, the lower your PTI ratio the better. It’s also good to know that lenders typically estimate $100 a month for auto insurance, so you should do the same when putting together a budget.

4. Research Vehicles From Home

Now that you know where your credit stands and have a budget, you can start looking at vehicles that fit your budget. Keep in mind that when you have bad credit, it’s not the time to finance your dream car. You should search both new and used vehicles that are affordable, reliable, and hold their value.

You can check into cars that fit your needs, and even see the latest deals that are available during this uncertain time. There are many automakers that are offering special car deals in light of the corona-virus situation.

Ready to Find a Dealership in Your Area?

Even if your credit is less than perfect, if you’re ready to take the next step and get a corona-virus car deal, simply fill out our easy, fast, and free auto loan request form.

Let do the work of finding a dealer for you. We work with a nationwide network of special finance dealerships that have the lenders available to help in unique credit situations. To get started, just click here.

Keeping Your Car Clean From The Coronavirus – COVID-19

Tips and tricks word on wooden table

Even though many (if not most) of us are dutifully staying at home during this global time of uncertainty in light of the corona-virus, or COVID-19, situation, some of us still need to leave the house. Whether it’s going to work, the grocery store for essentials, or a drive to the park to walk the dog, all of these things mean getting in and out of your car. Here are some tips for cleaning your car to reduce the risk and stop the spread of corona-virus so this can be done safely.

How Clean Is Your Car?

With that being said, when was the last time you cleaned your car? We don’t mean giving it a once over with the vacuum and throwing out any trash, either. Any surface you touch out in public has the potential to carry corona-virus. This could mean it can get in your vehicle, as well.

However, you can eliminate the spread of corona-virus by giving your car a thorough cleaning, and disinfecting the surfaces you come in contact with.

Cleaning the interior of your vehicle should be part of your normal maintenance routine. This can help keep the various surfaces in better condition, which only helps you in the long run. Besides, who doesn’t like to drive a clean car?

What Works Best to Disinfect?

When it comes to keeping your car disinfected, the good news is that you may already be doing what’s best for killing viruses on the surfaces of your vehicle. The secret formula? Good old-fashioned soap and water.

If you use products designed to keep your car clean, such as Armor All, you’re likely already using a product that can help you stop the spread of COVID-19: detergent. If you’re using products that are free of detergents, or if they’re solvent-based, they can’t help kill the virus – but a detergent can.

Make sure to focus on all the areas you touch regularly: the steering wheel, seat belts, infotainment/stereo systems, buttons and knobs, gear shift lever, turn signal lever, light switches, window buttons and door levers, trunk release and handle, the gas cap and gas door, etc. Don’t forget about your rear view mirror – especially if someone else drives the vehicle, too.

Some things you can do to help protect yourself and your car from the virus sticking around:

  • Wash your hands before entering your vehicle.
  • Keep cleaners and gloves in your car.
  • Wipe down everything you put in your vehicle with Lysol or Clorox wipes (follow directions on packaging).
  • Wear latex gloves or use a paper towel at the gas pump.
  • Avoid letting others enter your car (unless you’re quarantining with them).
  • If you have cloth seats, spray them with Lysol after cleaning the rest of the surfaces.
  • If you have a leather interior, use a leather conditioner, or a moisturizing cleanser before spraying with Lysol.

Keeping these tips in mind can help keep you, and your loved ones safe from germs, bacteria, and viruses – not just corona-virus, but the common cold and flu, as well.

Do You Need a Car You Can Keep Clean?

If you don’t currently have a car to worry about cleaning, but need one, don’t fret because you think bad credit might stand in your way. In tough times like these, there are lenders available that can help people in tough credit situations – and knows where to find them.

We work with a nationwide network of special finance dealerships that have the lenders available to assist people who are struggling with bad credit, and we want to help you, too. It’s easy to get the process of finding a dealer started. Simply fill out our quick, easy, and free auto loan request form.

Buying a Car and Auto Insurance

When you’re financing a used car, you’re required to have full coverage auto insurance. But is there a date that you’re required to have it in place? Here’s what you need to know.

Buying a Car and Auto Insurance

When you finance a used vehicle, lenders require you to have full coverage car insurance before you can drive it off the lot. In almost every state, even if you aren’t financing a vehicle, it’s required that any car on the road must have insurance coverage that meets state standards. In many states, you can’t register a vehicle without insurance, either.

If you’re trading in your old car at a dealership to help with a down payment requirement for a bad credit auto loan, or to lower the amount you’re financing, you can typically transfer your current car insurance policy to the new vehicle.

This can be done rather quickly if you contact your insurance company and let them know the make, model, and VIN number of the new car that needs coverage. In many cases, you can set a date that the transfer needs to take place. If they won’t take the information over the phone, your dealer should be able to fax the vehicle information to your insurance company.

Go to the Dealership Prepared

Before you buy your next car and even if you’re trading in a vehicle, but especially if you aren’t, it’s worth it to shop around for auto insurance prices beforehand. Many insurance companies can give you quotes over the phone or online, and some offer discounts for signing up for coverage online or for paperless filing. Take your time to compare rates and coverages,and pick the best policy that fits your needs and budget.

While you’re shopping for your next car, take time to look at the price of insuring various models. Insurance rates vary between makes and models – some vehicles are more expensive to insure than others. Used and new cars usually also vary in coverage costs.

Get quotes from a few different auto insurance companies. Just remember that full coverage policies are required for all financed vehicles, and these policies are more expensive than liability coverage (sometimes called PLPD).

If you’ve chosen a car insurance policy but the underwriting process isn’t complete, you should be able to get an insurance binder so you can take delivery of your vehicle.

Car Insurance Binders

If you’ve found the used car you want from a dealership, chosen an insurance company, and you need the vehicle right away, there’s a way to drive it off the lot with temporary proof of auto insurance. It’s called an insurance binder.

An insurance binder serves as temporary coverage until a policy is issued for a car. The expiration date of a binder can vary, but they typically expire anywhere from 30 to 90 days.

Borrowers typically get a binder so they can go to the dealer with proof of insurance and drive their newly financed vehicle off the lot. Binders are issued by insurance companies while the insurance company verifies a policyholder’s information during the underwriting process.

Make sure you receive your policy and coverage starts before the binder expires – otherwise, your car won’t be covered. A financed vehicle must have full coverage auto insurance throughout the entire loan term. You may risk getting force-placed insurance added to your monthly loan payment by your lender if the car isn’t properly covered.

Force-placed coverage, also called lender-placed, is an auto insurance policy that’s tacked onto your monthly loan payment if your coverage lapses. These policies are typically more expensive than regular car insurance, since your lender likely won’t rate shop – they just want the vehicle insured.

The Bottom Line

When you finance a car, new or used, you’re going to need to get full coverage auto insurance. You’re required to bring proof of insurance to the dealership before you can drive your new vehicle off the lot. If you’re hoping to drive a new to you car off a dealer lot, and you’re looking for a dealership that can work with unique credit situations, we want to help.

There are dealers with special finance departments that are signed up with subprime lenders. These lenders help bad credit borrowers finance a vehicle that fits within their financial situation – and when these lenders set a budget for you, they also consider the cost of auto insurance. Here at, we know which dealerships work with bad credit lenders.

To get matched to a dealer with special finance options in your local area, simply fill out our free car loan request form.

The Best Times to Buy a Car

Sometimes it’s all about timing. That’s certainly the case when buying a car. Before heading to the dealership, you may want to apply for a car loan online and also consider these ideas about the best time shop for a new vehicle.

Day of the Month All the savvy-car-shopping experts agree – the end of the calendar year is the best time to visit the car dealership. Don’t forget to do your research well before you go. The savviest of the savvy say there are actually specific months that bode best depending on what vehicle you’re buying. May isn’t just for flowers after April showers. It’s for midsized SUVs, too. Get down to the dealership with spring in the air and in your step to get yourself a healthy serving of safety with a side of savings. Are you a truck person? October is monster truck month – not just for a show – for epic savings – so be sure to get yours. It’s not spooky to win at saving. If sedans and coupes are your speed, November is for more than just Thanksgiving. Go talk turkey with your local car dealer. Luxury your thing? You’ll need to exercise some patience because your month is the year’s last. Deals abound in December on luxury vehicles, especially high-end SUVs. Give yourself a great gift and save money doing it. If you don’t believe in the month-specific-savings hype, you can buy a new vehicle any month of the year. Play darts with a calendar, but be sure to go at the end of whichever month you choose. The very best time is the last day of the year. Bonus savings points if it also happens to be the last day of the month.

Day of the Week & Time of Day Then there’s the day-of-the-week camp. They don’t care which month, but you’d better be sure you’re at the dealership early in the week. If you’re serious, make it Monday. Not sure what time to go? Don’t bother taking the day off. Have dinner and then stop by to see your local car dealer. Make an evening of it and plan to be out late. The later you keep them at the dealership, and yes, they will stay to close a deal, the better price you’ll negotiate.

Holidays / Special Events Pro tip: Black Friday isn’t just for TVs. We all know that Black Friday means getting up early or just skipping sleep altogether. Early bird gets the worm and all that. Still true. Go, fight big crowds, buy lots of gifts and save lots of money. Then, have a relaxing dinner and follow the same guidelines noted above. Finish your Black Friday with a gift for yourself – an awesome deal on a new car. All those three-day weekend holidays were basically invented for salespeople to make their yearly quotas. Hey, they’ve got to eat too and it helps you get great deals. Some things only the keenest car consumers know is that mother nature plays a role in the sales cycle. Other deal days are rainy days (and Mondays, but we’ve already covered that) and because we know we’re supposed to go at night – do it by the light of a full moon. Some experts say the lunar cycle and precipitation can make a difference in your favor. You can also enjoy savings offers during model changeovers and be sure to look out for special factory rebates. Another thing to keep in mind before you head to the dealership is how much you can afford. Try using an online car loan calculator so you know before you go. Now go forth and save!

Owning a Vehicle: Know the True Cost

When it’s time to purchase a vehicle, whether new or used, it’s important to pay attention to more than the purchase price. Of course, that’s the primary expense, so let’s first take a look at the monthly car payment. According to Experian, for 2017, the average payment for new vehicles is $506 and $364 for used vehicles. Whether new or used, car payments vary based on your credit. If you’re going to purchase a car soon, you’ll benefit if you pre-qualify for a car loan before visiting the dealership.

AAA has been studying the total cost of car ownership since 1950. According to the organization’s 2017 study, it costs nearly $8,500 annually, or just over $700 monthly, to own and operate a new vehicle beyond the actual purchase price. For new vehicles, AAA accounts for fixed costs such as finance charges, insurance, depreciation, as well as the variable costs of fuel and maintenance. Used vehicles incur additional expenses too.

If you’ve purchased a new car, you’ll want to consider depreciation. Unfortunately, you’ll lose an average of $15,000 in value over the first five years according to AAA. Some vehicles depreciate more quickly than others. If maintaining value is important to you, possibly a small sedan or small SUV is best, both depreciate more slowly than other vehicles. Not surprisingly, electric vehicles depreciate at the quickest pace, followed by minivans.

As for the annual variable costs of car ownership, the largest this year is fuel. This expense varies greatly depending on the type of vehicle and gas. AAA derived a standard, determining Americans spent, on average, $1,500 to fill their tanks.

We also look to AAA for average maintenance and repair costs per year, which is $1,186 for 2017. This figure includes regular maintenance such as oil changes and replacement parts like new lights, batteries, and tires in addition to more complicated repairs.

Regarding used cars, the purchase price, and therefore loan value, will decrease compared to a new vehicle. Insurance and depreciation costs will be lower with used vehicles as well. Maintenance costs may be higher, however, in the end, you can save substantially by buying a used vehicle.

Thinking of buying soon? Visit and use the convenient tools to discover your possible car payment. Be informed before going to the dealership and get the offer you deserve.

Note – There may be minimal monthly cost overlap of finance charges. This charge was factored into both Experian and AAA studies.