It wasn't that long ago that those customers with bad credit had few choices when it came time to buy a new car. In fact, their choice was which used car appealed to them the most – a new car was simply not part of the equation. Now, in many cases, they can also browse the new car lot.

Why buyers now have more choices

Dealership Image

Here at Auto Credit Express, most of us have been in the subprime car business for more than 15 years. During that time, we have seen the number of banks that deal in bad credit new car loans grow from just a handful to more than a hundred. While many of these subprime lenders are regional, this is still a significant difference. Not only do these banks cover a much broader spectrum in the market, they also compete with one another for business.

This competition has led to more competitive (relatively speaking) interest rates as well as a broader product offering. Included in many of these programs is the ability to finance a new car. And while the lending requirements for bad credit new car loans are much stricter than for conventional loans, there are still many new car models that qualify for such programs.

Things to consider when purchasing a new car

There are certainly many benefits to buying a new car instead of a used one:

1. All new cars come with factory-backed warranties
2. Many new car warranties include free roadside assistance
3. Many new cars are available with the option to purchase warranty extensions that cover the entire loan period.
4. In most instances, buying a new car means you have a choice of colors and options.

There is also a downside to purchasing a new car and that has to do with depreciation. Most new cars depreciate 15% as soon as you drive them off the dealer's lot. This means that much of what you are financing will be lost to a drop in value of your new car. The fact is, unless you put down at least 20% of the selling price, chances are you will be “upside down” in the loan for at least 2 ½ years on a 5 year loan. This period of negative equity also increases as the duration of the loan increases.

The Bottom Line

When it comes to bad credit new car loans, everyone's situation is unique. At Auto Credit Express, we know that finding the right dealer can make the task of getting a loan even harder. Fortunately, we are experts in bad credit car loans. Our nationwide network of affiliated dealers specializes in helping customers with bad credit reestablish themselves while driving a new or low mileage quality used car. For more information on bad credit new car loans as well as the subprime loan process, visit our website at