Choosing New or Used for a Bad Credit Auto Loan

There are a number of situations in which bad credit car loan customers may have to decide between buying either a new car or a used car.

Been there. Done that.

Before we get into today’s topic, we want you to know that if you are serious about reestablishing your auto credit and raising your credit scores, we want to help you. Our business here at Auto Credit Express is to match up our credit-challenged applicants, who have filled out our bad credit auto loan application, with dealers in our nationwide network that can help them get this kind of a loan. By doing this, applicants can not only reestablish their car credit, they can also raise their FICO scores.

On our web site, we provide potential applicants with much of the information they need in order to make an educated decision on how to approach the credit auto repair process, since a poor decision could result in being trapped in a loan they can’t afford.

This situation could also result in repossession. If this happens, the only remaining choice is a tote the note car dealer. It also means that reestablishing your auto credit has to be put on hold for at least a year, since most lenders that offer auto loans for bad credit will only consider approving applicants with a repossession that’s more than a year old.

More choices

There are many of us here that were in the car business in the mid 1980’s. Back then, given a choice of a new or used car, there was no question that most of our customers would’ve chosen new. Build quality was something only the Japanese had a handle on and, besides; most used car service contracts at the time were very basic, at best.

In today’s market, many certified used vehicles have warranties that rival that of their new vehicle counterparts. Build quality has reached a point where most domestic models are equal to or even surpass those from Japan. Even the up and coming Koreans – long known for their low prices – are assembling world class cars. In addition to quality, most of the used cars in today’s market are also very reliable and, with normal upkeep, can easily be expected to be driven in excess of 100,000 miles or more.

What this means

For the bad credit car buyer, this means that depending upon your credit history and the kind of payment call that you get from a lender, you may have the choice of either a new or a used car. Keep in mind, though, that if you are only able to purchase a used car, there are still many advantages to this choice.

New Cars

Aside from that new car smell (which you might end up paying dearly for), the advantages to buying a new car are obvious. All of them come with a factory warranty. In many cases, this warranty also includes such amenities as roadside assistance and telematics programs (such as GM’s OnStar). In addition to the standard warranty, you can also purchase a “wrap around” warranty that will extend the new car warranty (or portions of it) through the balance of the finance period.

Used Cars

Of all the advantages of buying a used car, the biggest one has to do with the “D” word: depreciation. Most new cars depreciate 15%-20% the first year. In fact, it’s not uncommon for a car to lose 60% of its value in 5 years. Buying a 2 or 3 year old car (many with a portion of the original factory warranty remaining) will save you thousands of dollars in initial costs as well as finance charges. Many service contracts are now backed by the manufacturers, while certified used car programs, while pricey, offer many buyers additional peace of mind.

How we can help

Here at Auto Credit Express, we specialize in helping customers with bad credit find a dealer and get car loans with bad credit to begin the process of reestablishing their car credit. Our web site,, will walk you through the process of applying for a loan by using our secure car loan application. With pages devoted to research as well as FAQ’s, we will try and answer all your questions. If you can’t find the answer on one of these pages, we have customer service representatives that are more than happy to assist you during normal business hours (8:30am – 5:30pm Eastern Standard Time).

So if you are serious about getting your credit back on track, you can begin the process right now by filling out our secure online bad credit car loan application.

Posted on August 3, 2010 by in New Cars, Used Cars
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