Choosing Back End Products for a Bad Credit Auto Loan

Avoid the mistake of adding unnecessary extras to a bad credit car loan

Our concerns

At Auto Credit Express we’ve spent the last two decades working with bad credit retail car buyers. So if you’re currently thinking of purchasing any of a number of backend products offered by dealers, you’ll want to read this first to be aware of those options to consider as well as the products you’d be better off taking a pass on.

Another example of our commitment to buyers with poor credit is our web site that features a bad credit car loan application – something we realized was needed after seeing the disappointment and confusion which customers with bad credit often experience at dealerships that don’t offer second chance auto loans.

And while credit-challenged buyers can always visit a local tote the note dealer, this won’t solve their car credit issues since these dealers usually don’t report loans or loan payments to the credit bureaus.

The good and not so good back end products

In addition to knowing a vehicle’s specifications, you also need to know that car dealers sell a number of other products and services on the “back end” (the car is considered to be the “front end”) of the sales transaction.

Although most dealers are pretty straightforward when it comes to selling you a car, even we have to admit that there are a few dealers out there that give the rest a bad name by trying to trick buyers into paying for additional products and services that they really don’t need at the time they sign up for a bad credit auto loan.

To be fair, many of these back end products could end up saving you money. Products such as gap insurance make sense if you have very little money down and you’re financing your car for more than 36 months. A service contract might also help you if you drive a lot of miles and you’re planning on making payments past the original warranty term. A service contract makes even more sense if you are buying a used car with little or no warranty and you’re on a tight budget.

So here’s our take on a select few back end products:

The good

Gap insurance – as we’ve said, depending on your situation this type of protection can be worth the cost.

Service contract – Again, this is also one of the good adds, although not always good for everybody. If you drive ten to twelve thousand miles a year and keep your vehicles for only two to three years, turn it down if you’re buying a new car because you won’t need it. Above all, don’t let anyone tell you that you have to purchase an extended warranty because the bank requires it.

The bad

Market adjustment
– This one can be tricky. If a customer can offer a dealer less than sticker price for a vehicle, why can’t a dealer charge over the MSRP if a particular car is popular and in high demand? One way to check this out would be to call different dealers in your area to determine if you are able to buy it at or less than MSRP. If you can’t, it’s your call as to whether or not it is worth the extra money to buy it now or whether waiting a few months might save you hundreds or even thousands of dollars.

The ugly

Window etching – Window etching involves etching your vehicle’s VIN number onto the windows of your car. The cost to do this generally runs from $200 to as high as $350 or more. You might be able to bargain the price down to a hundred dollars or so, but that’s still much more than it would cost you if you did it yourself. If you really have to have your windows etched, buy a kit at your local auto parts shops for around $20 and do it yourself.

Preparation fees – Believe it or not, there are still a few dealers out there that think they can get away with charging a vehicle preparation fee. But a closer look at the window sticker will tell you these fees are included in the MSRP by the manufacturer. If this is added to the buyers order, ask that it be credited back to you. If it isn’t, just walk away from the deal.

As we see it

Whether or not you choose a particular back end product is a decision that you will have to make. Just be sure you’re not paying for any of the “ugly” ones.

At Auto Credit Express, we specialize in placing customers with bad credit with dealers that can help them. These dealers are knowledgeable and work with a broad spectrum of lenders to ensure you have your best chance of getting approved for a bad credit car loan.

So if you are serious about getting your car credit back on track you can begin by filling out our bad credit auto loan application now.

Posted on February 12, 2011 by in Auto Loans, Backend Products, Bad Credit, New Cars, Used Cars
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