Recreational financing can be tricky. Many consumers don’t understand how the process works, and even though plenty of myths can add to the confusion, we’re here to clear up the truth behind them all.
The Greatest Myths of Vehicle Financing
When it comes to dealer services financing, many myths exist along with lots of confusion. But consumers don’t have to be limited by these false beliefs. Below are the top four, debunked:
1. Credit Score Is the Only Thing That Matters
Credit scores are only a small portion of what lenders consider. In reality, a person’s credit score is just a small fraction of their credit profile. Obviously, you want to aim for the highest score possible, but there shouldn’t be much to fret about as long as your rating is between 700 and 850. However if you have a credit rating under 700, there is still hope. When consumers apply for a loan, lenders pay special attention to the risk factors surrounding one’s credit history. This includes income level, employment history, an applicant’s age, and their overall debt-to-income ratio.
2. You’re Limited to Only One Credit Score
The three most popular credit bureaus are Experian, TransUnion, and Equifax. You can get a different score from all three without it having any effect on your overall credit profile. Each agency documents specific public records, meaning some lenders don’t report to each bureau. That’s why it’s most beneficial to collect a credit score from all of them. This allows F&I managers to examine three different credit reports, and from there they can submit the best option to the lender.
3. Car Loan and Recreational Vehicle Loans Are the Same Thing
The experience of buying a car and a recreational item may be similar, but the loan process is significantly different. Recreational loans are typically stricter than traditional automotive loans. That’s because a higher risk is involved in purchasing a recreational item. Consumers are more likely to pay off their necessary debts (cars, mortgages, etc.) before they set aside money for luxury items like RVs and boats. It’s your F&I department’s responsibility to distinguish the differences between car and recreational loans before submitting the wrong application.
4. Loans Are Off Limits for Those With Bad Credit History
Traditional loans are not your only option. For those with poor credit, non-prime loans might be your best option. Nonprime loans are for people who suffer from lower credit scores, insufficient or comparable credit, bankruptcy, and other unique credit-related situations. And even though lenders have standards to follow, they are still human.
F&I managers make sure lenders are aware of any credit-related challenges. They’re more likely to grant loans to people who are bringing in alternative income streams such as child support, alimony, or regular trust funding support. Finally, it’s important to know it’s never too late to develop good credit habits. If you want to boost your credit quickly, start paying your bills on time, close any unused accounts, and avoid any available “credit max” opportunities.
Peace of Mind Financing Support
At Finance Solution, we know how difficult auto financing can be, but we’re always there to simplify the process. Whether you have good credit or no credit, you can always count on us to help you secure the loan you need. When we’re by your side, you’ll be able to take advantage of several world-class solutions including:
- Car Dealer Service Financing
- RV Financial Loans
- Insurance Outsourcing
- Boat and Trailer Financing
- Online Credit Applications
If you want to speed up the loan process and make the buying decision easier, contact us today to [schedule your free consultation] with our team!