The Right Subprime Car Dealer
by Steve Cypher on Thursday, August 27th, 2009Locating the right dealer for a bad credit car loan can be the most important step in the car buying process if you have bad credit.
Business trends
At Auto Credit Express, we’ve been involved with subprime car finance for the past 17 years. One thing we’ve noticed in particular is that over the past few years, auto dealer profits, especially those of the domestic car dealers, have been declining. In fact, it’s quite common these days for new car dealers to sell a vehicle for the invoice price just to move the unit and satisfy their sales targets with the manufacturer.
Another thing that we’ve witnessed: when auto sales are slow, dealerships look for additional ways to move more inventory off their lots. One of the ways in which to do this is to get a higher percentage of their floor traffic – especially those customers with bad credit – approved.
Special finance
That being said, many of these car dealers jump into the bad credit car sales arena without the proper training and, quite frankly, many of these dealers make a mess of it. With bad credit auto sales, the finance department has to do more work than it may be used to. As an example, it’s a good idea for dealers to verify employment and income before they finalize a bad credit auto loan. Here is why:
When a subprime lender first approves an auto loan, they assume all the information on the credit application is correct. After the car has been delivered and they receive the finance package from the dealer for funding, they begin the verification process. If the application was misrepresented, the lender may refuse to finance the vehicle.
When this happens, often a week or more after the sale, the dealer contacts the customer and asks them to return the vehicle (although in some states the dealer is now responsible for the loan). When it’s all over, everyone is upset; the dealer is mad because they lost the sale, the customer is mad because they wasted a lot of time and still have to buy a car, and the lender is mad because they had to return the deal (after spending a great deal of time and money processing the customer in their system).
Other mistakes
Dealers can also get tripped up even before they begin processing deals. When car dealers first begin bad credit auto sales, most do so with only a few subprime lenders. If you are a consumer with bad credit, it is much better to buy a car from a dealer that has numerous subprime lending sources at their disposal. The big advantage is that with a broad spectrum of lenders, you have a better chance of getting the best auto loan based on your credit (most car dealers that specialize in bad credit auto sales use special finance software to compare your credit profile and their new and used car inventory, against hundreds of subprime lending programs to get you the best deal possible).
The Bottom Line
If you have bad credit and need a loan to buy a car, make sure you do business with an auto dealer that specializes in bad credit auto sales. How can you accomplish this? You can either contact numerous dealers in the area until you find the one that that has the lenders and technology in place to best handle your credit needs or you can use a car buying service like Auto Credit Express.
At Auto Credit Express, our business is to help people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit at the same time. Our national network of affiliate dealers specialize in bad credit car loans. If you have any additional questions, our web site will help you determine how much car you can afford and, unlike other sites, our toll free number is listed on every page in case you have any additional questions.
For more information, visit our web site at www.autocreditexpress.com.
Tags: aaa, car loan, car loan quote, car title loans, credit bureau, credit score, free car loan quote, honda, kelley, title loan, toyota
