You know you want to upgrade from small-sized compact car to family-friendly minivan, but are your finances going to present a major roadblock? If you believe your financial profile isn’t quite good enough, think again. You can locate bad credit van finance options through many different channels and you can get approved for the funds you need to improve your quality of life through an adequately-sized car.
But before we tackle the nitty-gritty financial aspect, are you 100% positive a van is the right vehicle choice for you?
Should You or Shouldn’t You Buy a Van
There are so many makes and models on the market, it might be impossible to list them all. From Smart cars to Hummers, there’s a vehicle for every sized person and personality. Most van buyers have one characteristic in mind they desire: more space. But there are many other benefits to driving a van, and there are a few drawbacks as well.
First, let’s talk positive. Vans usually seat at least seven people, but sometimes more like 15. It depends on the size you are going for. Not only that, but they come with tons of leg room, cargo space and maybe even a spot for the dog. Large families swear by vans and even larger families can’t function without them.
Vans offer wonderful visibility for drivers. The wide windshield and elevated view gives the driver a clear picture of the road, offering confidence and lending to better decision-making in the driver’s seat.
Since many vans are marketed to families, they value their safety ratings like gold. The National Highway Traffic Safety Administration (NHTSA) rates vehicles according to how they pass various impact tests. You can easily check to see how the van you want performed, ensuring you are purchasing a secure vehicle that will withstand any accident.
Now for the very few negative aspects…
Vans are not known for their amazing gas mileage. While they get better fuel efficiency than large SUVs, they are about on par with mid-size SUV fuel ratings. Most authorities concur the average van gas mileage can be expected to hover around 20 miles per gallon, city and highway combined.
Newer model vans can retail for a premium. To get an outstanding deal, consumers should look for vans a model year or two in the past to avoid the high ticket price and fast depreciation on brand new vehicles.
Choosing the Right Van Based on What You Need
If space, both for people and cargo, is the primary reason you’re interested in a minivan, look for vehicles with the following features:
- Foldable Second and Third Row Seating: depending on the make and model, the van may offer whole-row folding or 60/40 folding in both the second and third rows. Some models take it a step further and allow the seats to fold into the floor of the vehicle, offering even more space. This is ideal for last minute home improvement store runs where you splurge on an impromptu grill or inflatable pool.
- Reconfigurable Seating: you may want to move the captain’s chairs to the third row and the bench seating to the second row. You should have control over this decision, and some vans offer the versatility of reconfigurable seating for flexibility when deciding seating arrangements.
Also look for vans with important safety features such as side airbags all the way to the back of the vehicle, protecting second and third row passengers, and traction control for increased stability on the roadways.
Now it is Time to Buy
If you are dead set on purchasing a minivan and know it is the right move for you and all the members of your family, why wait? The more time goes by, the closer you become to not needing a minivan anymore. It goes to show that the sooner you purchase a van, the more use you will get out of it.
There are competing schools of thought on the time of year best to purchase a vehicle. Most authorities concur that later in the year is ideal. In the springtime, tax refund checks cause an increase in vehicle sales. You may not get the deal you’re looking for since auto retailers know you are one out of many potential buyers to come around.
On the flip side, later in the year also means a drop in inventory. If you have a specific model you are after, waiting until the last few months might mean your first choice make and model is out of stock.
Regardless of which month you choose to purchase a vehicle in, make sure you visit the dealership on either a Monday or a Tuesday in the later weeks. Less of a crowd means more attention on you, and more pressure to make a sale on the part of the car salesman.
Later in the month also means salesman are pushing to make target sales goals and may be willing to bend on their prices just a smidgen. For you, it means paying your desired price. For them, it might mean the difference between losing or keeping their job.
Don’t put in your offer first thing in the morning. Shop around in the early afternoon and make an offer just an hour or two out from closing time. The sales team won’t want to let you get away, since once you walk out of the door, they are unlikely to see you again (or so they think.)
Now that you’re aware of timing tactics designed to land you the killer deal of the century, make sure you have the financial side of things in order before you jump into negotiations with the dealership. You’ll be happy you have all the paperwork and approvals ready to go, so once they accept your low offer, they don’t have time to change their mind.
What is the State of Your Credit?
First things first: what does your credit look like? Before you even set a budget for your van buying, you must know what range your credit score falls into, unless you are one of the rare consumers who can afford to purchase a van all cash.
Don’t know how to look up your credit score? Visit www.AnnualCreditReport.com and gain access to one of three free credit reports from the three major bureaus – Experian, TransUnion and Equifax. While the credit report will not tell you your exact credit score, it shows you all the data your credit score is based on.
You can analyze the entries on your credit report, making sure each is completely factual. In many cases, consumers find errors on their credit report which have a negative effect on their overall score.
If you want to contest an entry, send a letter to the credit reporting company with any information available to back up your claim. They are required to review it and send you a statement as to why they did or did not absolve it from your credit report, which normally takes place within 30 days of receipt of the letter.
If you have a credit card that offers free credit monitoring service, you can check your credit score at the bottom of your monthly statement. Monitor changes and pay attention to sudden drops. You may have been the victim of identity theft if you have not applied for any new credit lines or received any bills, but see a drastic change in your score in a short amount of time.
Most credit reporting organizations rank credit on a point scale, ranging from 300 to 850. The scores are generated based on these factors drawn from your credit report:
- Payment history: do you pay your bills on time?
- Balance owed: do you utilize less than 30% of your approved credit?
- Credit history: do you have a long record of successful credit?
- Types of credit: do you have a varied range of credit lines?
- Number of inquiries: have you applied for an unusual amount of credit lately?
After reviewing this data, your score is ranked in the following brackets:
- Excellent Credit: 781 and above
- Good Credit: 661-781
- Fair Credit: 601-660
- Poor Credit: 501-600
- Bad Credit: 500 or lower
Now, just because you have bad credit doesn’t necessarily mean you are in a negative financial spot in your life. In reality, maybe you simply have never applied for credit before or your credit card has not been open long enough to reflect positively on your profile.
There is a wide range of reasons for bad credit, many of which do not reflect badly on the individual applicant, which is why bad credit van finance options abound and you do not need to fret if you can’t seem to find financing right away.
How to Find Bad Credit Van Finance Choices
While many might jump into the bad credit van finance arena unprepared, they may soon regret this decision. Use the following guidelines to prepare yourself before going after a loan that will put you in the driver’s seat of your desired minivan.
- Don’t Panic
Some people who apply for van financing and are turned away begin to panic. They may not have even known their credit was in shambles, but now they don’t know what to do. The knee-jerk reaction might be to immediately start applying for financing all over the place…but this is a bad idea. Too many sudden inquiries can knock your score even lower. Stop. Take a deep breath. Reassess your options before you move forward.
- Vary Your Choices
It won’t always be a traditional large bank that offers the best rates. Look at what local credit unions or online loan services have to offer. Sometimes, the best bad credit van finance options are where you least expect to find them.
- Rely on a Trusted Friend
This piece of advice is especially important when applying for loans in person. Bring a sensible adult with you whose opinion you trust. You may be approved on the spot for a bad credit van finance loan, but should you take it? Talk to your friend about your goals before you enter the situation and they will be able to offer unbiased, unfiltered advice before you sign on the dotted line.
- Know What You Can Afford
Just because you think you deserve a van of a certain caliber does not mean you can afford it. Don’t forget to add on licensing and registration fees to the final loan payment. Additionally, if purchasing a van from a dealership, you may have to contend with other fees, charges and you may want to purchase a warranty. It’s wise to come up with a dollar amount you can comfortably pay each month towards your bad credit van finance loan beforehand, and if the price goes over your budget, be prepare to walk away.
- Prepare to Prove Income
Bad credit van finance loans may require the applicant to substitute other forms of financial verification if their credit score is not up to par. Gather your most recent paystubs, including any disability, child support or other benefits you may receive. This can all count towards your total monthly income, which may determine your eligibility for many different bad credit van finance loan choices.
- Consider a Co-Signer
A spouse or parent with a higher credit score who is willing to co-sign is a valuable tool in the bad credit van finance marketplace. Make sure they understand their duties as a co-signer. Only partner with another adult if you are serious about paying back your loan on time, so you will not wreck their credit in the process. If you don’t, this could lead to bad blood in your relationship and may be much harder to solve than a van financing puzzle.
When researching your bad credit van finance options, stick to your priorities. What do you want in a minivan? How much do you want to pay each month? Always make financial loan decisions based on reason and good sense, and you’ll save lots of cents in the long run.