Tricks of the Trade

Since the early 90's banks and finance companies participating in sub prime auto loans have relied heavily on a computer generated scoring system to determine the risk factor of a loan. In short, the higher the score the lower the interest rate. This program was implemented primarily to reduce the amount of loans in default due to non-payment. In their efforts to take some of the decision making away from their loan officers they created what is known today as your Beacon score.

To eliminate the bad judgment factor they usually automatically declined applications that had too low of a Beacon score. This system proved to be adequate in reducing the amount of bad loans. However, over a period of time it became obvious that even though they had fewer loans in default, they weren't lending out enough money to stay in business.

The solution was simple: Redirect the decision making process to those most qualified.

This brings us to the point. Before a decision can be made on a loan, as a matter of policy they must verify your income and conduct a five minute interview with you, the buyer. In most cases the approval will be based on your response to a couple of simple questions. Since the lender is concerned about the repayment of the loan, they will be interested in your budget.

Please be prepared to discuss briefly how you determined your budget, and how you came to decide on what you could afford. The best way to determine this is to:

The amount of money left over is what you can budget up to and be ok.

The amount that you budget for must include your car payment and insurance. This brings us to the next concern. Be prepared to offer information when asked about the cost of your insurance.

Take the time now before they call to obtain a couple of insurance quotes. This is an act of a responsible person concerned about the well-being of the bank's collateral and, responsible people get loans. Its that simple.

For your convenience we have added a couple of links below that will allow you to obtain free insurance quotes. We suggest that you use them for a couple of reasons. First, to make sure that you are getting the best rate available to you and second to ease any concerns the bank may have about the seriousness of your resolve. If you're not sure of what type of vehicle you want, just pick something you would like to have and obtain your quotes on it. For this exercise the exact vehicle is not important. You can make your final decision about that at the time of signing.

If you have any question please contact us, and we will promptly reply.

Thank you in advance for your business and good luck!