Welcome to Finance
Bayou Ford offers multiple financing options for our customers. We have dealer agreements with over 20 national auto lenders and credit unions. Each lender has several programs within their loan portfolio. Our lenders offer specialized loan products for Prime customers, Nonprime customers, and Subprime customers.
- Prime customers generally have very good credit with scores ranging between 700 and 850.
- Nonprime customers generally have average credit with scores ranging between 600 and 699.
- Subprime customers generally have below average credit scores ranging between 0 and 599.
These are some of our more popular lenders:
- Ford Credit
- Ford Credit Commercial Lending Services
- Capital One Auto Finance
- Chase Auto Finance
- TD Auto Finance
- Ally Bank
- Hancock Whitney Bank
- La Capitol Federal Credit Union
- Jefferson Financial Federal Credit Union
- Credit Union Acceptance Company
- Santander Consumer USA
- Credit Acceptance
- Crescent Bank & Trust
- Regional Acceptance
- Exeter Finance
Our lenders offer simple interest auto loans. The major advantage of simple interest loans is the interest is calculated on a daily basis off the remaining principal balance. Additional principal payments lower the remaining balance thus lowering your interest. Based on the example below if you paid an additional $100 towards principal each month you'd save $823.82 in total interest and payoff the loan off early.
|Loan Start Date
|Extra Principal Payment
|Total Monthly Payment
Auto loans are very different from unsecured personal loans. An unsecured loan or signature loan are not backed by collateral. If the borrower defaults on the unsecured loan the lender has no collateral to offset the unpaid debt. Unsecured loans are much riskier for a lender and generally require the borrower to have excellent credit! Auto loans are backed by collateral, which lower the risk for the lender. If the borrower defaults on the auto loan the lender can repossess the vehicle and offset the unpaid debt by reselling it. This is why the vehicle the customer selects is just as important as their credit score. These are some of the underwriting factors lenders use to determine auto loan approvals.
- Credit History is your track record of paying off debt, especially previous auto loans and other installment loans. Having the income ability to repay debt is different than proving your intent to repay debt. High income producing borrowers don't always pay their debts in a timely manner. The more positive credit history the better the loan scores.
- Job Stability is your ability to maintain employment for an extended period of time at the same company or related field. Most lenders like at least 1-year on the job and no more than three job within 2-years. Changing jobs frequently alarms most lenders. The longer the job stability the better the loan scores.
- Residence Stability is very similar to Job Stability. Most lenders like at least 1-year at your current residence and no more than three residences within 2-years. Moving around frequently alarms most lenders. The longer the residence stability the better the loan scores.
- Loan-to-Value (LTV) is calculated by dividing the total auto loan amount by the value of the vehicle. For example, a loan amount of $15,000 and a vehicle value of $17,500 equates to 86% LTV. The lower the LTV the better the loan scores. A very low LTV (50-60%) can decrease the risk of the auto loan to a point that the lender will overlook the other underwriting factors. LTV plays a huge role in determining the interest rate on auto loans, especially nonprime and subprime. The chart below shows a nonprime approval on a used '17 F-150 with a value of $46,725. The interest rate varies from 6.54% to 9.99% based on LTV.
||80% - 89%
||90% - 99%
||100% - 109%
||110% - 119%
||120% - 129%
- Income Stability is one of the main factors lenders use to determine your purchasing power. Your ability to repay debt is determined by how much money you make. The higher the income the better the loan scores.
- Debt-to-Income (DTI) is calculated by dividing your total monthly debt payments (including the new auto loan payment) by your gross monthly income. For example, total monthly debt of $1,500 and gross monthly income of $3,500 equates to 43% PTI. Most lenders do not want your PTI to exceed 45-50%. The lower the DTI the better the loan scores.
- Payment-to-Income (PTI) is calculated by dividing your auto loan payment by your gross monthly income. For example, a loan payment of $500 per month and gross monthly income of $3,500 equates to 14% PTI. Most lenders do not want your PTI to exceed 15-20%. The lower the PTI the better the loan scores.
Acceptable forms of income vary from lender to lender, and some lenders don't require any proof of income based on the approval tier. These are the most common types of income.
- W-2 Income. The employers report employee wages, tips, bonuses and all qualifying compensation using IRS Form W-2. The employer becomes responsible for collecting and filing all appropriate state, federal, and social security taxes. Lenders that require proof of income usually want a computer-generated pay stub with year-to-date (YTD) earnings dated within 30 days of contract date.
- 1099 or Self-Employed The employee is required to report all wages and compensation to the IRS using Form 1099-MISC. Lenders that require proof of income usually want the most recent 3 months of personal bank statements, or a completed 4506T form.
- Non-Salaried Income. Child Support, Alimony, and Foster Care are acceptable forms of income. Lenders that require proof of income usually want a copy of an official signed court document and 3 month of personal bank statements/court receipts showing actual receipt of payment.
- Supplemental Income. Social Security Income/Pension/Permanent Disability Benefits/Annuity/Other Retirement Benefits are acceptable forms of income. Lenders that required proof of income usually want a current benefit letter proving the stated income or the most recent bank statement showing a direct deposit amount and source of the deposit.
- Military Income. Lenders that require proof of income usually want a copy of a current Leave and Earning Statement (LES). Active duty military income is usually based off the total amount listed under the Entitlements section, minus any advance pay, clothing allowances, or other bonuses. National Guard and Reserves income is calculated off the base pay. VA benefits usually require a copy of a current bank statement with proof of deposit or direct verification with the VA office.
- Other Incomes. Rental income, secondary jobs, and temporary jobs may be an acceptable form of income. However, each lender has different minimum requirements and acceptable proof of income stipulations.
Leasing versus Buying
Is it better to lease or buy? It depends. Leases and loans are two different ways of financing vehicles. Leasing finances the use of a vehicle; the other finances the purchase of a vehicle. Each has its own benefits and drawbacks. No one can simply say that one is always better than the other because it depends on your own situation and preferences. You must not only look at the financial comparisons but also at your own personal priorities what's important to you.
You should consider leasing, if you'd like to drive a new car every two or three years, prefer lower monthly payments, drive under 12,000 miles per year and want to avoid paying for any major repair work. However, you should think about purchasing your next vehicle if you like to keep your car for longer than three years.
Leasing typically offers significantly lower payments than buying. One of the main lease factors that determines your monthly payment is residual value. For example, if you lease a car that costs $20,000 with an estimated residual value of $13,000 after 36 months (65%), then your payments are based off the $7000 difference (depreciation). If you buy the car your payments are based off the entire $20,000.