Clarifying No Credit Check Auto Loansby Steve Cypher on Wednesday, November 21st, 2012
There are still many credit-challenged consumers that pick a tote the note car dealer because there is no credit check involved, but also because they believe it’s their only choice once they’ve been turned down for a conventional auto loan.
At Auto Credit Express we know this is the case because for the past two decades we’ve been helping car buyers with poor credit scores find dealers for their best chance at approved car loans.
It’s also a big reason why we go to great lengths on our website to explain why a no credit check auto loan, although easier to qualify for, will not help as much as a car loan which includes a check of your credit report.
Those no credit check auto loans
The biggest difference between no credit check car loans and other types of vehicle loans is that these loans don’t require a qualifying FICO score or a credit check for an approval. Since credit scores aren’t part of the equation, even if your credit is really bad you can be immediately approved for an auto loan.
While the qualification process is fairly simple, there are a number of things to consider before applying for one of these buy here pay here (BHPH) car loans:
• Large down payments – BHPH dealers typically require a down payment equal to, or more than, the cost of the vehicle (to cover any losses in case the borrower skips out even before making the first payment).
• High interest rates – To cover the high risks these loans pose, interest rates typically start around 25% and can often go up from there.
• Older, high-mileage vehicles – because of the age and mileage usually associated with these vehicles, buyers can be stuck with expensive repair bills in addition to high monthly car payments.
• Electronic monitoring – The best BHPH dealers excel at collections. To encourage on-time payments and make locating and repossession easier, more cars are being equipped with electronic immobilizers that deactivate the ignition if a payment is missed as well as installed GPS devices can precisely pinpoint a vehicle’s location.
• High repossession rates – In most cases, just one missed weekly payment means the car can be repossessed (in most cases the remaining loan payments still have to be made).
• No credit score improvement – Making timely loan payments will not improve your FICO scores because most BHPH no credit check car dealers are notorious for not reporting loans or payments to the credit bureaus.
An alternative auto loan choice
With all these negative aspects of BHPH dealer loans, before taking this step why not consider another car loan possibility for car buyers with bad credit?
If your FICO scores are low or you’ve been rejected for a traditional car loan, we suggest that you first check us out here at Auto Credit Express. That’s because we specialize in placing customers that have auto credit issues with dealers that can give them their best opportunities for approved auto loans.
So if you’re looking for more than just transportation and you’d really like to get your credit back on track, you can begin now by filling out our online car loans application.