Consumer Car Buying Advice Blog

While in house financing helps many Canadians get a car, there are alternatives that can lead to a better credit score and, eventually, lower interest rates down the road

What is in-house car financing?

In the states it’s called “buy here pay here” or “even tote the note”. But in any language, it refers to a car loan where the dealer acts as the “in house” lender. Unlike indirect lending, where the car dealer acts as an agent for the bank, in-house lending is direct lending – you are borrowing money from the dealer that you buy the car from.

What those of us at Auto Credit Express know about in-house financing

Here at Auto Credit Express, we are very familiar with this type of lending. It is a form of subprime lending that has been around for many years. In fact, in house lending was the first form of subprime car lending. While this type of lending may have made sense when it first began, just like the Model T Ford, it has been replaced by programs that are much more advantageous to the customer.

The Pros

Most of the advantages of in house lending lie in the fact that, for the most part, all you need to a loan is a down payment and a job. Most of the cars are very low-priced, and you make payments on a weekly basis. It’s also easy to find an in-house dealer – most can be found on the main roads of larger towns.

The Cons

While the cars are affordable, they are usually older and have many kilometers on the odometer. Being older, they also have issues with upkeep and repair. The biggest issue, however, has to do with payment reporting – most of these smaller car lots don’t report your payment history to the credit bureaus.

Here at Auto Credit Express, we want you to rebuild your car credit

The reason most bad credit customers can’t get financed with a regular loan is because their credit score is too low. Buying a car from an in-house financer won’t help them in the long run because, even if they make every payment on time, this positive credit history won’t appear on their credit report. The credit bureaus won’t have this information because the in-house dealer doesn’t want to take the time to report it to the credit bureau. Without this new, positive credit history, the customer remains a bad credit car customer.

At Auto Credit Express, we have helped thousands of Canadians with bad credit drive a new or low-mileage quality used car. Our nationwide network of affiliated dealers specializes in bad credit car loans – eliminating the need to spend hours trying to find one. Our web site, www.autocreditexpress.com, has calculators and a resource page to educate you about the buying process. When you’re ready, our secure car loan application can be filled out in the comfort and security of your home. Remember, here at Auto Credit Express, we want you “on the road” to better credit!

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