What is a third chance at car credit?

As you can quickly guess from its name, the third chance at car credit is a solution offered by financial institutions for people who have a bad credit rating but who want to be granted financing for their new automobile. This third chance aims to propose financing plans. Let’s see if the third chance at car credit is just a solution or a real opportunity.


The third chance at credit: definition

credit loan

The third chance at credit is the term for different auto financing programs that are offered by conventional financial institutions. These programs are offered to people whose funding request is considered high risk and whose conventional funding programs are not accepted. Indeed, each request for financing a car loan requested from a conventional financial institution is subject to a decisive evaluation which involves observing, among other things, the credit applicant’s history and credit rating.


A car loan financing program: details

car loan

A third chance financing program may, for example, and in many cases, involves pre-leasing an automobile. Because the financial institution starts by renting an automobile, it takes much less risk of having its reimbursement not made because it remains the owner of the vehicle until the borrower has paid the loan in full. In most cases, according to the contracts offered by each financial institution, the residual value is low and the borrower can buy the car at the end of the term of the loan. The majority of requests made to financial institutions are accepted because the banks take almost no risk. In the worst case, they can resell the vehicle.For this third chance to be accepted, it is then in most cases necessary to pay an amount that will pay for the depreciation of the automobile. This corresponds to around 20 to 25% of its initial price.

The pros and cons of a third chance at car credit

car credit

  • Advantages: Because the third chance is always an open contract, it is possible to stop it by buying it entirely at any time. In addition, this type of financing is considered a commitment that increases your credit rating with each payment made to your financial institution.

  • Disadvantages: These funding programs are often very expensive but also incentive. Indeed, you must always be careful to choose an automobile whose price will respect your budget in the long term so as not to get into debt with a financial institution for too many years. In addition, these financing programs require interest rates which are generally around 30%, which can quickly ruin you. Finally, financial institutions often sell additional insurance and guarantees to drive up the final bill.

Because it generates a lot of additional costs, the third chance at credit is not always the best solution available to you to be able to finance the purchase of a new car. Another alternative is to request a short-term loan from a private company specializing in personal loans, which will lend you a small amount in the short term without doing a credit check, but only according to your repayment capacity. More advantageous, these personal loans allow you to target the acquisition of a car that respects your budget and to have interest rates lower than the third chance at credit with financial institutions.

Know: Which score is good for car finance?

The desire to buy a new car comes up against a common dilemma: “Which score is good for financing?”. One of the main points in evaluating a buyer to finance vehicle is the credit score. This value is a result of the payment habits and the citizen’s relationship with the market. If the score is low, hardly any financial institution will authorize any type of business.

You, your neighbor, your mother or your uncle are constantly evaluated from your Kerasa Score. Having good credit in the square means being able to easily apply for credit cards, apply for loans and, of course, make bank financing. If you have tried to create a credit card with no annual fee, for example, and have been declined, it could mean that your score is low.

If you are unsure which score is good for funding and are afraid of having your proposal declined when purchasing a new car, the time has come once and for all to understand how credit score works and how to increase the score.


What is score?

credit score?

Before understanding which score is good for funding, you need to know exactly what this index means and its functionality. As we mentioned above, in order for companies to authorize or not authorize some kind of business, they need to know how trustworthy this customer is. To measure this confidence, Kerasa takes into account different information to generate an index, which ranges from 0 to 1000 points , presenting the possibility for the client to meet their debt payments.

The closer your score is to 1000, the higher your score is and the most likely you are not to delay your accounts. Already if your score is closer to 0, it is a low score and shows that you probably don’t pay everything on time.


But after all, what is taken into account in this score in the Score?

financial score

There are a number of factors that influence score scoring from a combination of information in the Kerasa database and related queries by service customers. They are checked if the person’s name has been filthy, if he / she usually pays the bills on time, companies that the citizen relates to, has bad checks, possible search and seizure actions, participation in bankruptcy or bankruptcy, default annotations, among other aspects related to the financial profile.

In addition to the personal profile, the score on the score also includes the level of default and the volume of economic activity of the city or region in which the person concerned lives.


How to consult the Kerasa score

How to consult the Kerasa score

Did you know that you can consult your CPF score for free? To know which score is good for funding you must first have a real idea of ​​how much your score is currently. Through Kerasa Consumer website you can see this value and compare with the average related to your age and region. Check out a step by step how to register and access:

Step 1

Visit the Kerasa Consumer website and click on “Consult Now”

Step 2

If you already have registration, simply enter your data. If not, you can sign up with Facebook, Google account, or an email. To do this just click on the desired option.

Step 3

Fill in the registration form with CPF, Full Name, Date of Birth, Email and password of at least eight characters, without containing the first or last name present in the registration.

Step 4

After completing the completion, you will be asked to validate your registration via email or phone.

With validation, you will be redirected to the main page that will already have your Kerasa Score score and an assessment of what your current situation is, ranked low, medium and high.


Finally, which score is good for funding?

Finally, which score is good for funding?

The time has come to know which score is good for funding. In fact, we regret to inform you, but there is no practice in specific credit score score to ensure your approval of a vehicle finance. This is because it depends on each financial institution and other aspects that can be analyzed. However, scores above 700 points are considered good grades and may end up having a higher chance of getting the funding approved.

However, if you have had a negative history with a financial institution, such as letting an account be delayed or waiting for the statute of limitations, this could be detrimental to you.

It is therefore very important, rather than having a high credit score, to have a more conscious and balanced consumption behavior , avoiding creating debts that you will not be able to pay or putting yourself at risk by delaying bank payments, such as credit card payments. . . Having good relationships with the bank has the same effect as having good relationships with friends and family.

But of course you should not stop worrying about your score. As much as you have seen the answer to the question, “ Which score is good for funding? ”, Be it“ depends ”, it is always important that you take care of and track your score. If you seek to increase it, the first step is to clear your name . Seek to renegotiate your outstanding debts and get your CPF off the delinquent list. Contacting the outstanding financial institutions that you are interested in renegotiating shows that you are a customer concerned about your debts.

We hope we helped you understand a little more about which score is good for funding and how your score influences at that time. Here at Automotive Shopping we perform the analysis and approve your credit on time. Count on us when it comes to financing your new car !

Used car credit: pledged car, buyer-seller, how to do it?

What is a pledged car? What implications for a sale? How to raise a pledge on a vehicle? Pledge and used car loan, what should we expect? So many questions that must be answered before committing.

Pledged car: what does it mean?

Pledged car: what does it mean?

There is generally a little confusion between the designation of pledged car and of pawn car in prefecture. The fact that the pledge is not registered at the prefecture does not mean that the car is not pledged. Staking a car means that a person, generally a borrower, undertakes to hand over the pledged vehicle if he is unable to execute the contract which binds him to his creditor (credit agreement with the financial institution).

In other words, it is not because the auto credit organization does not register a pledge in the prefecture, that the vehicle is not pledged. Basically, a car is pledged from the moment when the initial credit agreement (which was used to buy the car the first time) contains a clause indicating that the lender must be asked for the right to resell the car. This is particularly the case for new auto credit.

Point of vigilance when buying a car

Point of vigilance when buying a car

When buying a used car, the seller is supposed to provide a certificate of non-pledge administratively called certificate of administrative situation. This certificate of non-pledge must be dated less than 15 days. It attests to the absence of registration of pledge on vehicle, and a certificate of absence of opposition to the transfer of the registration card.

NB: if the seller of a used vehicle is unable to provide this document, it is probably due to an administratively pledged car. To verify this, it is possible to obtain a certificate of non-pledge free of charge on the website of the Ministry of the Interior: request for a certificate of non-pledge. (you still need to have some info from the registration card).

However, it is therefore possible to obtain a non-pledge certificate for a pledged car! It all depends on whether the initial credit organization has registered the pledge in the prefecture or not. This certificate is therefore not an absolute guarantee that there is no pledge linked for example to the first credit contract which was used to sell the car. So you have to be careful when you want to buy or sell your car with an outstanding loan.

On the other hand, when you buy a used car on credit, financial institutions and banks no longer take a pledge (generally it is a credit contract not allocated to the sale). This administrative lock costs them money. However, a pledged car that they would come to seize in the event of a problem with repayment of the used car loan would not bring them much money compared to the age of the pledged vehicle.

This is also the reason why used car credit is a little more expensive than new car credit. It is therefore even more necessary to compare the best used car loan rates.

How to raise the pledge of a vehicle?

In order not to block the sale of a pledged car… the pledge must be lifted. For this, there are not 36 solutions, the bank or the credit company having registered the car pledged at the start must have it raised in the prefecture. Until this is done, you should not buy the pledged vehicle.

You should not buy a pledged car otherwise you expose yourself to a significant risk. Indeed, if the seller of a used car has not yet finished repaying his car loan and there are repayment problems, the initial credit organization will be entitled to seize the car. The purchaser of the second-hand vehicle can therefore have his car seized when he has purchased it quite honestly.

Tips when buying a used car

  • Obtain a certificate of no pledge of less than 15 days from the seller
  • When negotiating, try to find out how the seller bought the car initially and whether the car loan has been repaid.