Used Car Dealers and Bad Credit
by Dave LaLonde on Thursday, November 1st, 2007If you have bad credit chances are that when it comes time to buy a new car you will start first start by visiting used car dealers, either online or at the lot. I’m not sure why this is the tendency. The fact is that if you have bad credit you are more likely to get approved at a new car dealer that specializes in bad credit financing, than you are at a used car dealer.
The main reason for this is that most of the national sub prime auto lenders only partner with new car dealers or very large independent used car dealers. So if you visit a franchised car dealer more often than not you will have more lenders competing for your auto loan, and as the saying goes, when lenders compete you win.Why do most lenders only do business with franchised dealers? Franchised dealers not only have passed an rigorous approval process by one of the OEM’s, each month they have to maintain certain levels of working capital, that is to say, money in the bank. Used car dealers are no under such scrutiny. In addition, franchise car dealers have repair facilities on site, and most perform standard maintenance on their used cars before they are offered for sale to the public.
Since not every franchised dealer is able to accommodate people with bad credit, it is important that you find on that does. Bad credit auto loan services like Auto Credit Express® can help you find a franchised dealer in your area that has the lenders in place to accommodate a wide variety of credit situations. Most lenders specialize in a small segment of the lending market, for example:
First Time Buyer and No Credit Car Loans
Bankruptcy Auto Loans
No Money Down Auto Loans
Low Income Car Loans
To summarize, if you have bad credit and need an auto loan to buy a car, chances are that you will get a better car and a better loan if you visit a franchised car dealer that specializes in helping people with bad credit, than you will get from a local used car dealer.
