How To Finance A Car With Bad Credit
How To Finance A Car With Bad Credit
With today's ecoomy are there any lenders that want to finance a car for someone with bad credit? The answer is YES. 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 looking for auto financing.
The worst were the ones with the sense of entitlement. Strolling onto the car 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. These people are obviously dreamers.
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, they wanted auto financing, but were convinced the banks were not going to lend to them. These people suffered from low expectations.
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 auto financing works in the car business, and especially regarding a bad credit car loan.
What most people don’t know is that major 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 vehicle 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!
So what is the difference between pre-approved auto financing versus vehicle financing 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.
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. When you need a loan for your car getting pre-approved means that you can find the best vehicle in your price range and negotiate with the dealership for it.
Bottom line – Pre-approved auto financing is the only way to get the best deal on your next vehicle purchase.
Click Here to see a complete list of our bad credit auto loan lenders
CAR NEGOTIATING TIPS FROM A FORMER CAR SALESPERSON
Before you shop for a car learn the car negotiating tips that every dealership uses to get more money from you, less for your trade and higher payments. Don't shop before you read this!
DELETING BAD CREDIT
85% of all credit reports contain errors. Do you know your rights? If you have bad credit due to wrong information then the law is on your side and you CAN get it fixed. Here's how.
HOW CREDIT REPORTS WORK
If you're shopping for a new car then you need to understand your credit report! What do lenders look for and what will get you in trouble.
AUTO LOAN CALCULATOR
So you know what your pre-approved for. But what will that translate to in monthly payments? Here's a handy car loan calculator.
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