Consumers with limited or poor credit often have more opportunities than they may realize with the used car auto loans available from subprime lenders
Before visiting a BHPH car dealer, car shoppers with problem credit should consider the advantages of financing a used vehicle with a car loan from an indirect higher-risk lender.
Here at Auto Credit Express we know that taking this route can result in better credit scores as well as establishing car credit and that choosing the right kind of vehicle is also a key in completing this type of loan successfully. The reason we believe this is true is because for over two decades we’ve been helping consumers with questionable credit find those dealers that can give them their best opportunities for approved auto loans.
In fact, one of the questions we get asked most frequently is “can you finance a car without credit?”
The answer is that in many cases (although not all) you can, but its critical when you do that you choose the right car.
Twenty-five years ago, the difference between new and used cars was much wider than it is today. Back then, new vehicles were much more reliable and most came with a warranty that covered manufacturing defects for at least the first two years.
Buying used, on the other hand, was more of a gamble. Although many of them turned out to be very dependable, there was always the chance a buyer would inherit the problems of the previous owner.
The buying experience was also radically different. Instead of looking at shiny new models in a dealer showroom, you were often forced to shop at small open-air lots while dealing with a salesperson that would tell you little more than “trust me. It runs great.”
Used car choices
New car dealers and manufacturers now understand the importance of the used car market. Adding to this is the fact that the vehicles, themselves, have also changed.
In addition to regular used cars, most franchised new car dealers also offer certified used cars – newer, lower-mileage vehicles with manufacturer-backed used car warranties. In this case, if a used car meets certain guidelines, the dealer can place a warranty on it that essentially extends the new car warranty – in some cases for as many as 7 years or 100,000 miles, depending upon the vehicle and manufacturer.
While these certified used cars are usually more expensive, they do offer more peace of mind.
Vehicle build quality has also improved tremendously and, with proper maintenance, most cars should last for 100,000 miles or more while the issue of previous owner problems such as maintenance and accident damage issues has also been addressed – at least partially.
Companies such as AutoCheck and Carfax will, for a fee, furnish you with a vehicle history report that includes an accident check, mileage accuracy check and warranty check along with other vehicle history details. These reports, however, should only be thought of as a starting point since they’re not always complete. The fact is, you should have any used car you’re thinking of buying inspected by an ASE Certified Master Mechanic as well as a body and frame specialist before you consider buying it.
Finally, the biggest reason for buying used is depreciation. Since all cars drop in value over the years and the highest percentage of that loss occurs during the first two to three years of ownership, the amount paid for a newer used car is typically a much better value than that of a new one. For buyers with problem credit this is especially important when you consider the higher interest rates charged by subprime lenders.
The Bottom Line
For car buyers with less than perfect credit, choosing a quality newer used car over a new model usually makes more financial sense.
Another thing that makes sense: if you have poor credit or if you’ve been turned down for a car loan by a traditional lender, we want you to know that here at Auto Credit Express we specialize in helping applicants with bruised credit find those dealers that can give them their best chances for auto loan approvals.
So if you’re ready to reestablish your car credit, you can begin now by filling out our online auto loans application.