Consumer Car Buying Advice Blog

Online lenders can help you with a conventional loan but it becomes more complicated if you want to buy a car with a bad credit car loan.

The internet and car loans

At Auto Credit Express, we know that the internet has spawned literally hundreds of companies offering to help you finance a car – we happen to be one of them. But which of these online car lenders can really help you, especially if you have bad credit?

Stretching the truth

We recently read a blog article that had this to say about online lending: “The truth is this. You can buy a car with bad credit with no down payment and also with lower interest rates by simply avoiding the dealer finance department altogether. If you know where to look and prearrange your financing (yes it’s done everyday), then you can have the confidence to walk into a dealership, pick out the car of your choice based on the amount the finance company preapproves you for and had the dealer a check. This puts the power of negotiating price in your favor.”

Unfortunately, this person is only half right.

Online services

There are two basic types of online car services – direct lenders and lead placement services. The direct lenders are the banks, themselves. The lead placement services are companies that either deal with a network of banks or represent a network of car dealers.

Looking at the situation logically, it would appear that the best choice would be to directly deal with the banks. They are, after all, the places that actually loan the money. If you go to a car dealer, that dealer has to get the money from the bank, so why not go directly to the bank, yourself?

Good credit and bad credit

Here is where the process begins to separate the good credit customers from the bad credit customers. If you have good credit, you can spend a few hours on the internet and visit most of the national lenders. In order to determine the interest rate you qualify for, you will probably have to submit an application to each individual lender. This will create a number of inquiries on your credit report, but if you complete this process within a few days your FICO score will not be overly affected since the credit bureaus will view this as a single transaction.

If, on the other hand, you go through a placement service and it is sent to a dealer, that dealer can study your credit report, check the rates at all the banks they do business with and pick the one or two with the best rates. This will cut down on the number of credit bureau inquiries, and you can always compare this rate with a direct rate before you accept it.

Bad credit car loan buyers

If you are a customer with bad credit, it’s even more important that you make the right decision. If you go the direct lender route, not only will you have a number of inquiries on your credit report, there is also no guarantee that you will get an approval. Most bad credit car loan lenders only do indirect lending through dealers, so there’s a good chance that you won’t even get approved for a loan online. And if you do get approved for a loan, that loan may carry a higher interest rate than you might otherwise have qualified for at another subprime lender that only works through a retail car dealer.

The solution

The obvious choice, especially for customers with bad credit looking for online car lenders, is a placement service. And here is where we come into the picture. For nearly 20 years, Auto Credit Express has been helping people with credit problems get approved for new and used car loans. Our dealers work with a broad spectrum of lenders to get you approved. Once you’re approved, each month you make a timely car payment you will improve your credit score and reestablish your financial future.

Unlike many other services, we belong to the Better Business Bureau and our web site is SSL secured, ensuring the privacy of your personal information. Since our inception, we have processed over 1,000,000 online applications and closed over 1 billion dollars in bad credit auto loans.

Isn’t it time you visited www.autocreditexpress.com to see what we can do for you?

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