Consumer Car Buying Advice Blog

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There are three main categories of auto finance lenders for people with bad credit. They are Direct Lenders, Indirect Lenders, and Buy Here Pay Here In House Financing. (more…)

When you buy and finance a car with bad credit chances are you will be offered additional products during the loan closing process. I would like to take the time now to discuss these and give my recommendation as to whether or not you should purchase and finance these additional products.

There are actually only two products that I feel strongly about and always recommend people with bad credit purchase when financing a car. They are Gap Insurance and a Service Contract (sometimes referred to as a warranty). The reason I feel so strongly about these products is because I seen many people who had good credit end up with bad credit because they did not purchase these products when they financing their last car.

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When it comes to getting an auto loan with bad credit, most lenders have a score card that they use to rate your credit worthiness and risk. Rarely will sub prime lenders rely on the credit bureau score alone when making their decision whether to approve or decline an auto loan application. Following are a few examples of items that may be part of a sub prime auto lenders score card. (more…)

If a recent economic event such as change in employment, large medical bills, divorce, or legal troubles has turned your good credit to bad credit you can regain a good credit score. Many lenders are willing to help those who at one time had a good credit score and now have bad credit, especially if they can identify a single economic event that caused the good credit rating to turn to a bad credit score.

Many times when a consumers credit turns from good to bad they end up loosing their vehicle, either through bankruptcy proceedings or repossession; after that happens most consumers end up getting a bad credit auto loan through a sub prime auto lender.

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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: (more…)

Twelve years ago when I first started helping people buy a car with bad credit there were only a few lenders willing to give people with credit problems a traditional type of loan. When I say a “traditional type of loan”, I mean a lender that reports to all three credit reporting agencies and had monthly repayment terms via a traditional payment book.

At that time, it was more common for consumers with bad credit to buy cars from local “We Finance” used car dealers that had a buy here pay here “pay as you go” program. With these programs, the consumer visited the car dealer weekly to drop off their payment. In most cases, the “rent to own” vehicle was an older car valued between $1,000 and $5,000.

It was a major step toward rebuilding credit when national finance companies entered the sub prime lending arena around 15 years ago. The first special finance lending programs had repayment terms of 24, 36, or 48 months. Rarely would a lender approve a loan with a 60 month repayment term. These short repayment terms allowed consumers to buy a better car than they could purchase at a buy here pay here used car dealer. Based on our data, the average car purchased utilizing these terms was around $10,000.

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What should you expect if you request a bad credit auto loan quote online?

It really depends what type of web site you apply with. There are four types of websites competing for you business, they are:

Bad Credit Car Buying Services
Bad credit car buying services, such as Auto Credit Express, has an established network of dealers that finance people with bad credit, a proactive customer service department, and affiliate partners. In addition, Auto Credit Express has relationships with direct marketers and direct lenders.

Consumers that utilize the Auto Credit Express bad credit car buying service can expect to work with a single dealer in their area that is uniquely qualified to help them buy a car. We cannot help everyone, but we can help most people with reasonable expectations that are willing to put forth the effort to reestablish their credit rating.

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