Consumer Car Buying Advice Blog

Credit challenged consumers now have more choices than ever when it comes to choosing a used car for a bad credit car loan

Auto Credit Express and used cars

If you’re thinking of applying for auto loans for bad credit, you’re you may be wondering what choices you have in used cars. We know because at Auto Credit Express we’ve been working with bad credit car buyers for over two decades. After seeing the embarrassment and disappointment that customers with bad credit often face, we even constructed a web site highlighted by a bad credit auto loan application. Applicants are then matched with local dealers that specialize in second chance auto loans.

A tote the note car dealer, one alternative, can be a problem because normally these dealers don’t report loans or payments to the credit bureaus while this type of loan can also result in a greater chance of repossession.

But if you’re already in the process of buying a car and you’ve decided that it is more cost effective to go with a 2 or 3 year old used car, you’re now faced with another decision: should you buy a regular used car or a certified used car?

Certified used cars

Back in the early 1990′s, luxury car manufacturers were faced with a large number of lease turn-in vehicles that weren’t holding their value at the auto auctions. The manufacturers came up with a win-win solution to this problem: If the vehicles met certain age, mileage and inspection restrictions, dealers could purchase them back and sell them with a manufacturer-backed extended warranty similar to that found on new cars, but with the number of miles and years extended to cover up to 3 additional years and 100,000 miles.

With this additional warranty, dealers could sell them at a premium over non-certified vehicles. This meant the vehicles held their values better and, as a result,  luxury manufacturers were able to lease their new vehicles for less, due to higher model residual values.

Noting the success the luxury brands were having, most of the other manufacturers jumped on the bandwagon and began offering their own certified used car programs.

What is or is not covered under these certified programs varies widely. Jaguar, for instance, offers a 6 year/100,000 mile limited warranty (much like a new car) with a Carfax buyback guarantee, 24 hour roadside assistance, complimentary oil and filter changes and a slew of other amenities. Chrysler, on the other hand, offers a 3 month/3,000 mile limited warranty along with an 8 year/80,000 mile powertrain warranty and a Carfax vehicle history report, along with service coupons.

Manufacturer programs

Remember that this covers just manufacturer certified used cars. Just because a dealer advertises a car as certified does not mean it is certified by the manufacturer. Anyone can “certify” a car, since the word, itself, really has no meaning, other than to refer to a program. So make sure that the “certified” car you are buying is certified by the manufacturer. If not, you may be required to pay for any repairs up front and submit the receipts to the warranty company for reimbursement – a process that is much less desirable.

Certified or non-certified

Due to the difference in pricing between a certified and non-certified used car (Kelley Blue Book lists the values of each type), it would certainly pays to do your research. By going to consumerreports.org you can find out about the repair history of that particular model. If the repair history is spotty, consider either a certified model or one with a service contract – and compare the difference in price and coverage (systems, deductible, etc.) between the two. If the repair history is stellar, run a Carfax on the non-certified car. If the Carfax report is clean, you might not be able to justify paying the increased price for the certified used car.

One more thing

If you have bad credit, remember that Auto Credit Express has helped thousands of people with bad credit buy cars and reestablish their car credit at the same time. Our nationwide network of affiliate dealers specializes in bad auto credit.

So if you are serious about getting your car credit back on track, you can begin the process right now by filling out our secure online bad credit car loan application.

Tags: Bad Credit, bad credit auto loan, bad credit car loan, certified used cars, Used Cars

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