Consumers with questionable credit typically have a couple of choices when it comes to finance a vehicle but while a no credit check auto loan may solve a transportation problem it will not help reestablish car credit
What we know
More than a few problem credit car buyers choose a BHPH dealer not only because there is no credit check involved, but also because they believe it’s their only option if they’ve been turned down for a conventional auto loan.
Here at Auto Credit Express we know that for most buyers this isn’t case because for the past twenty years we’ve been helping car buyers with bad credit searching for online car loans find those dealers that can give them their best opportunities for a loan approval.
It’s also why we go to great lengths to demonstrate why no credit check auto loans, although easier to qualify for, will not help car shoppers as much as an auto loan that requires checking a credit report.
Comparing poor credit auto loans
The biggest difference between no credit check car loans and more traditional vehicle loans is that they don’t require a qualifying FICO score or a credit check for an approval. Since credit scores aren’t part of the equation, even if an applicant’s credit is really stinks they usually can be approved for a car loan.
While the qualification process is fairly simple, there are a number of things buyers should consider before applying for one of these loans:
• Large down payments – BHPH dealers typically require a down payment equal to, or more than, the cost of the vehicle (to cover any losses in case the borrower skips out even before making the first payment).
• High interest rates – To cover the high risks these loans pose, interest rates typically start around 25% and can often go up from there.
• Older, high-mileage vehicles – because of the age and mileage usually associated with these vehicles, buyers can be stuck with expensive repair bills in addition to high monthly car payments.
• Electronic monitoring – The best BHPH dealers excel at collections. To encourage on-time payments and make locating and repossession easier, more cars are being equipped with electronic immobilizers that deactivate the ignition if a payment is missed as well as installed GPS devices can precisely pinpoint a vehicle’s location.
• High repossession rates – In most cases, just one missed weekly payment means the vehicle can be repossessed (in most cases the remaining loan payments still have to be made).
• No FICO score improvement –Timely loan payments won’t improve a borrower’s credit scores because most BHPH dealers won’t report loans or payments to the credit bureaus.
What we can offer
With all the negatives involving BHPH loans, before considering this step why not check out another car loan option?
So if your credit scores are low or you’ve been rejected for a traditional car loan, we want you to know that Auto Credit Express matches applicants that have experienced car credit difficulties with those new car dealers that can offer them their best chances at approved car loans.
So if you’re ready to reestablish your auto credit, you can begin now by filling out our online car loan application.
Get your free credit score now! Get a copy of your most recent credit score.
Are you paying too much on auto insurance? Compare rates in your area and save.