Consumers going through a divorce that have cosigned for their spouse’s car loan need to be aware of how lenders view an auto loan contract that was previously executed even though this is addressed in the divorce decree.
A study conducted back in 2011 by Experian Automotive makes it clear that consumers with bad credit who finance used cars with subprime auto loans are at greater risk to be the targets of fraud than the average buyer.
Car owners with poor credit on tight budgets who finance their vehicles with higher-risk car loans are often especially sensitive to the costs of car insurance.
The current grading system for businesses used by the Better Business Bureau makes it much easier for consumers with poor credit to compare the various online auto loan websites.
Usually one of the first questions we get from car buyers with questionable credit is what interest rate they’ll be required to pay on an auto loan. And while that usually can’t be predicted, borrowers rarely ask what type of interest rate it is – something that could be equally as important.
For those unfamiliar with what the phrase “buy here pay here” means, it refers to a car dealer where you can not only purchase a car, but a dealership where you can finance it, right there, as well. In this case financing is arranged with money that is borrowed from the dealer instead of a bank, credit union or finance company.
What it comes down to is that most consumers with poor will reach the conclusion that it’s more affordable to finance a 2 or 3-year-old used car, especially with a high-risk auto loan. Considering the current level of vehicle quality as well as the high depreciation most new cars experience, this decision makes a lot of sense.
Almost immediately those same car buyers are often faced with another decision: should they buy a regular used car or a certified used car?