Bad Credit Car Loans 101. Why Pre-Approval Is So Important
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Bad credit car loans. With today's economy the phrase sounds silly, I know. Pre-approved bad credit car loans for people whose credit is tanked. The second type came on the lot meek and mild and wanted to buy a car “under $5,000” and finance it. They knew they had bad credit and thought they were “thinking like the bank.” In other words, lending them just enough to get a car, but not enough for a new or newer model. Both of these types had the potential to be completely ripped off by the wrong dealership. Why? Because they really had no understanding of how credit and financing works in the car business, and especially regarding a bad credit car loan. So What Are The Benefits Of Getting A Pre-Approved Bad Credit Car Loan? Most people don’t know is that bad credit auto loan lenders “charge” the dealership a fee for the risk they are taking on you. What does this mean? The charge is usually a percentage of the car’s value – for instance 5%. So if you’re buying a $10,000 car and the fee is 5% then that’s $500 the dealership WILL NOT take off the price of the car! Not only that, the $500 is part of the amount you’re financing so you are actually paying the bank to assume the loan. I have seen charges as high as $2,000 because of a person’s credit! What’s the difference between pre-approved car loans and getting a loan at the dealership? Pre-approval means everything is up-front. The bad credit auto loan lender gives you a fixed amount they will loan you and a guaranteed interest rate. You then head out to the dealerships and look for something in that price range. Pre-approval gives you negotiating power which guarantees you the best price on the vehicle of your choice. Getting A Pre-Approved Bad Credit Car Loan Means You Can Pick The Vehicle YOU Want. If you are pre-approved for $15,000 then you won’t be out looking at vehicles that cost $22,000, wasting your time, and having your credit pulled multiple times by the car dealerships. Once you know how much you’re approved for you can find the best vehicle in that price range and negotiate with the dealership for it. Bottom line – Being pre-approved for a bad credit car loan is the only way to get the best deal on your next vehicle purchase.
But there really ARE lenders out there that want to help you into a new vehicle, regardless of your credit.
As a car salesperson in Phoenix I dealt with a wide range of people with bad credit. The worst ones were the ones with the sense of entitlement. Strolling onto a lot as if they were millionaires and picking out a vehicle that was obviously outside their price range based on their credit history and/or income.
Click Here to see a complete list of our bad credit auto loan lenders.
