Consumer Car Buying Advice Blog

Yesterday I filled in for customer service for a few hours and had the opportunity to speak with many of our clients. Many of them posed a similar question to me. “Should I find a car first or should I get approved for an auto loan first”. Since this is a common question I decided to share my thoughts on this subject today.

In my opinion, if you have bad credit you should get approved for an auto loan before you choose a car. I do not say this just to promote our service; my opinion is based on years of experience working with dealers and people with bad credit. Many of the dealerships I have visited have a stick sales process. The process is the same for all customers whether they have good credit or bad credit. For example:

1. A sales person meets and greets the customer.
2. The sales person determines the wants and needs of the consumer.
3. The sale person presents vehicles that fit the consumer’s wants and needs.
4. The consumer selects a vehicle to purchase.
5. They the deal; price, down payment, and estimated payment
6. The consumer completes a credit application
7. The finance manager attempts to get the deal approved with a finance company.

The process outlined above is used at most every dealerships and it works fine if you have good credit. If you have bad credit, however, this is most likely a formula for disappointment. Often when I visit a dealership the sales or finance manager will hand me a stack of deals that they could not get approved. Almost as if to say “OK hot shot, let’s see what you can do with these.” Most every auto loan application I review is eligible for financing, just not on the vehicle that was selected.

When this happens I’m the one that contacts the customer and breaks the news to them, it goes something like this:

“Mr. Smith, we were unable to secure financing for you on the brand new explorer, we can however, get you a loan for up to $15,000.”

The customer, more often than not, is so disappointed that they decide to shop at a different dealership. This time, however, the consumer is armed with a general price range in which they can shop. When they visit the next dealership they select a vehicle within that price range and repeat the whole process. Often, their auto loan request is once again declined. This time, however, it is declined because the dealership they chose did not have the proper inventory or lenders to accommodate their credit situation.

All of this can be avoided by using Auto Credit Express, or a similar service to insure that the dealership you shop at has the inventory, lenders, and technology in place to handle your specific credit situation. If you decide to shop first at a dealership, make sure they have the lenders in place to handle your credit situation before you fall in love with a car.

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