Consumer Car Buying Advice Blog

Understanding the difference between no credit check tote the note dealers and those that offer loans that can repair your credit

Bad credit buying choices

It’s a fact that many credit-challenged car shoppers still believe their only choice for horrible credit auto loans is a buy here pay here dealer.

We know because for the last decade here at Auto Credit Express we’ve been helping these same buyers find a dealer. It’s also why our website explains issues such as interest rates for approved auto loans and repossession as well as today’s of why a no credit check car loan, although easier to qualify for, will not help as much as bad credit car loans where the lender will run your credit report.

No credit check auto loans

A no credit check car loan doesn’t require a qualifying credit score or a check of your credit in order for you to get approved. Since your FICO scores don’t matter, even if your credit history is really bad you can be instantly approved for an auto loan.

While loans like this are easy, there are a number of things to consider before applying for one of these “tote the note” loans:

•    Large down payments – Dealers typically require a down payment that’s at least equal to the cost of the vehicle (to cover any losses in case the borrower skips out before even making the first payment).
•    High interest rates – To cover the high risks, interest rates on no credit check loans usually start at 25% and increase from there.
•    Older, high-mileage cars – You could end up paying for expensive repair costs in addition to a monthly payment because of the typical vehicles used for these loans.
•    GPS devices on many vehicles – To make locating and repossessing easier, vehicles can be equipped with an electronic immobilizer that deactivates the ignition if you miss a payment as well as a GPS device that pinpoints the car’s location.
•    Higher repossession rates – Typically, if you miss just one weekly payment the car can be repossessed (you’ll still be required to make the remaining loan payments due on the contract).
•    No FICO score improvement – Even if you make every payment on time your credit scores will not improve because, typically, no credit check dealers don’t report loans or payments to the credit bureaus.

Another choice

Before considering a no credit check loan, why not give us a shot at your business?

If bad auto credit has been holding you back from applying for an auto loan, you should know that Auto Credit Express specializes in placing credit-challenged applicants with dealers that can give them their best chance at getting approved for a problem credit auto loan.

So if you’re ready to take that first step in improving your car credit, you can begin now by filling out our online auto loans application.

Tags: Bad Credit, bad credit auto sales, no credit check

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