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Helping Consumers Buy Used Cars with No Credit and No Cosigner

New proposed rules for the Used Car Buyers Guide should help consumers with poor credit who finance used cars with higher-risk auto loans
Helping Consumers Buy Used Cars with No Credit and No Cosigner
Our opinion

The Federal Trade Commission (FTC) has announced that it is considering making changes to the Used Car rule that was last reviewed in 1995 – changes that could help buyers with problem credit that plan on financing their next vehicle with a subprime auto loan.

At least that’s our take here at Auto Credit Express where we’ve spent the last two decades helping car shoppers looking for online car loans find those dealers that can give them their best chances for car loan approvals.

Used cars

We also know that one of the keys to successfully completing one of these loans is picking out the right vehicle which, for buyers with bad credit and because they’re more affordable, will probably be a used car.

At the same time it’s important that these cars won’t cost buyers hundreds or thousands of dollars in additional repair charges since, in most cases, these vehicles aren’t covered by the same state lemon laws that cover new cars.

In this case buyers need to clearly understand any warranty coverage a particular used car might have while being reminded of what they can do to ensure the vehicle they’re buying is what it’s represented to be.

 FTC rule changes

In a press release issued back in December, the FTC made the following announcement:

As part of the Federal Trade Commission’s systematic review of all of the agency’s rules and guides to ensure that they are up-to-date, effective, and not overly burdensome, the FTC is seeking public comment on proposed changes to the Used Car Buyers Guide required by the agency’s Used Car Rule. The Commission is also issuing a final rule that makes technical corrections and revises the Spanish translation of the Buyers Guide. The Buyers Guide gives consumers critical information about who will pay for repairs if something goes wrong with the car they buy.

The Commission is now seeking comments on potential revisions to the Rule that would empower consumers without adding burdens to businesses, including:

• adding a statement to the Buyers Guide encouraging consumers to seek vehicle history information and directing consumers to an FTC website for more information about vehicle histories
• adding a statement in Spanish to the Buyers Guide directing Spanish-speaking consumers to ask for a copy in Spanish, if they desire
• adding catalytic converters and airbags to the List of Systems on the back of the Buyers Guide
• placing boxes on the back of the Buyers Guide where dealers will have the option to indicate whether (1) the manufacturer’s warranty still applies; (2) the manufacturer’s used vehicle warranty, such as a manufacturer’s certified used car warranty, applies; or (3) some other used vehicle warranty applies.

The proposed Buyers Guide also makes some minor changes to improve readability.

Watching out for car buyers

The release goes on to state that both the proposed Buyers Guide as well as the Current Buyers Guide:

• recommend that consumers ask about an independent mechanic’s inspection before purchase
• provide information about warranties
• list a vehicle’s major systems and the major defects that may occur in them
• and warn consumers that they should get all promises in writing because spoken promises are difficult to enforce

One other important thing to remember is that “The Buyers Guide disclosures are incorporated by reference into the sales contract, and govern in the event of an inconsistency between the Buyers Guide and the contract.”

The Bottom Line

The proposed changes to The Buyers Guide outlined by the FTC should help all buyers, including those with damaged credit.

One more tip: Auto Credit Express matches consumers with car credit problems to new car dealers that can offer them their best chances for approved car loans.

So if you’re ready to reestablish your auto credit, you can begin now by filling out our online car loan application.

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