What to consider and what to avoid when financing a vehicle with a problem credit auto loan
After the sale
Credit-challenged customers with approved auto loans can sometimes make poor decisions when they walk into the finance office.
We have observed this at Auto Credit Express where, for the past ten years, we’ve been helping bad credit buyers find a dealer that specializes in bad credit auto sales. On our website you can also research disability income and tote the note dealers as well as today’s topic: dealer back end products.
Finance and insurance products
Even with poor credit, dealers can sometimes offer you a number of finance and insurance products (called the “back end” since the car sale is the “front end”).
Some can be worth the cost, but others are a waste of money. Here’s our take on a few:
Gap insurance – With a small down payment or a finance term over 36 months, this insurance product can be worth the cost.
Extended car warranty – It really is a service contract and it can save you money if you’re financing past the new car warranty period. It makes even more sense if you’re buying a used car that has little or no warranty and you’re on a tight budget. But don’t believe it if anyone says you have to buy one because the lender requires it.
Documentation fees – Dealers charge Doc fees because they’re trying to recover the costs of doing the paperwork for horrible credit auto loans. But in reality, 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.
Forget about it
Window etching – This involves etching a vehicle’s VIN number onto the windows of a car. This can cost from $200 to $350 or more. Even if you’re given a discounted price, turn it down. If you must have it, buy a kit 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 vehicle preparation fees for new cars. But a close look at the window sticker you will show you this is included in the MSRP. If you see this fee on the buyers order, have it removed. If the dealer won’t do it, walk away from the deal.
As we see it
Choosing back end products is a decision only you can make. We suggest you consider those “worth it”, check out the “questionable” one and avoid the “forget about it” ones.
You also should know that Auto Credit Express specializes in placing poor credit applicants with dealers that can give them their best chance at getting approved auto loans.
So if you’re ready to take that first step in improving your auto credit, you can begin now by filling out our online auto loans application.
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