Finance and Insurance Products for Bad Credit Auto Loans

The back end products you can ignore when financing with terrible credit auto loans

Our take on things

Although many customers are getting smarter, there are still some that become confused when they sit down with the finance manager to discuss their approved auto loans.

We know because we’ve been involved with bad credit auto sales for two decades here at Auto Credit Express.

We even created a web site that helps explain the poor credit car loans process so applicants can pass up tote the note dealers while learning the facts about issues such as repossession as well as today’s topic, dealer back end products.

Back end products

Even though you may have bad credit, dealers can still sell you a number of products and services on the “back end” (the car is the “front end”) of a car sale.

Some might be worth the cost, while others are a waste. Here’s our take on a few:

The good

Gap insurance – With very little money down or if you’re financing for more than 36 months, this insurance product can be worth the cost.

Extended warranty – It’s really a service contract and it can save you money if the finance contract is longer than the new car warranty. It makes even more sense if you’re buying a used car with little or no warranty and you’re on a tight budget. But don’t believe it if anyone says you have to purchase one because the lender requires it.

The bad

Documentation fees – We get why dealers do this – because they’re trying to recover the clerical costs of doing the paperwork associated with selling a vehicle. But the fact is, this fee is not set in stone and in many states there is a ceiling on what a dealer can charge. Check it out with your DMV first and remember that like the price of the car it is subject to negotiation.

The ugly

Window etching – This process involves etching a vehicle’s VIN number onto the windows of a car. The cost of doing this can run from $200 to as high as $350 or more. Even if you’re offered a discounted price, turn it down. If you really feel the need, buy a kit at an auto parts store and do it yourself for around $20.

Prep fees – Believe it or not, there are still a few dealers that think they can get away with charging an additional vehicle preparation fee for a new car. But if you take a closer look at the window sticker you will see that this is included in the suggested retail price. If this fee is on the buyers order, ask that it be credited back to you. If the dealer won’t do it, walk away from the deal.

The Bottom Line

Choosing a particular back end product is a decision that only you can make. We suggest you take a closer look at the “good” ones and stay away from the “ugly” ones.

We want you to know this because at Auto Credit Express we help people with auto credit difficulties find a dealer for their best chance at approved auto loans

So if you’re serious about getting your car credit back on track, you can begin the process immediately by filling out our online auto loans application.

Posted on November 17, 2011 by in Auto Loans, Backend Products, Bad Credit
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