Consumer Car Buying Advice Blog

Buying a Saturn may or may not be a good deal for bad credit car loan shoppers.

How we see it

At Auto Credit Express, we view Saturn in much the same way as we looked at that of the Oldsmobile division as it neared the end of its production run in 2004. And while there may be some very good deals on Saturns in the next four months (depending upon how long it takes to sell the 12,000 or so Saturns currently in dealer inventories), whether or not these deals will make sense for bad credit car loan buyers is quite another matter.

Bad credit auto loans

The object of a bad credit car loan is not to finance your dream car. Interest rates can be much higher than conventional loans (double digit rates are common with rates of 20% or more possible). With the high interest expenses associated with bad credit auto loans, we recommend the shortest loan term possible, along with as large a down payment as you can afford.

There are two reasons for this. By putting down a large down payment, you are financing less and incurring lower interest payments. By shortening the finance period, you are not only cutting down on interest expenses, you are also setting yourself up for the possibility of either refinancing the loan or trading in the car with no negative equity earlier in the loan term (between 12 and 24 months into the loan).

Buying a Saturn

Taking both these things into consideration, then, what is the likely outcome of financing a Saturn with a bad credit car loan?

The pros

First of all, buying a Saturn right now is not necessarily a bad idea. GM is throwing a lot of cash at all current in-stock Saturns. A new 2008 Astra has $3,500 in dealer cash, while the 2009 Auras, Vues and Outlooks all have dealer cash ($4,000, $2,500 and $3,000, respectively). If you buy a car and drive it until the wheels fall off, buying one of these models certainly makes financial sense.

The cons

For bad credit car loan buyers, the downside to buying a Saturn comes down to the last sentence of why buying one right now makes sense: you would need to keep it and drive it until the wheels fall off.

But financing a car for the full term of a bad credit car loan means you are paying the maximum amount of interest on that particular loan. And when the interest rates begin in the double digits, you want to bail out of that loan as quickly as possible. Unfortunately, if Saturns perform the same as Oldsmobiles did in the 2000 to 2004 era, you can expect vehicle depreciation at the end of 24 months to match that of other vehicles at 60 months – which means that refinancing a loan or being able to trade your Saturn in with little or no negative equity halfway through the loan probably won’t be possible.

The Bottom Line

If your credit is good and you keep your cars forever, then buying a Saturn at this point in time may very well be a good idea. GM will certainly honor the warranty and, even when your Saturn dealer closes, there will be a dealer where you can get work performed on your car under warranty.

If you need to get financed with a bad credit car loan, however, there are a number of vehicles that will work much better than a Saturn – especially given the chance that these models will depreciate much more rapidly than models from other nameplates.

If you have any other questions and/or you are serious about getting your credit back on track, visit us at www.autocreditexpress.com. If you have any additional questions, feel free to contact us by phone or email us directly from our website.

Tags: auto loan, Auto Loans, bad credit, bad credit auto loan, bad credit auto loans, bad credit car loan, bad credit car loans, car loan, car loans, oldsmobile, saturn

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