Some consumers simply assume that because they have damaged credit their only option for an auto loan is a BHPH car dealer.
What we see
Because they may have been turned down for a conventional car loan and/or they cannot find a franchised new car dealer willing to help them, every year at least some borrowers with problem credit settle for an auto loan from a "tote the note" car lot.
Here at Auto Credit Express we've seen this situation repeat itself hundreds of times. That's because we've spent the past two decades helping car buyers with poor credit that are seeking online car loans find those dealers that can give them their best chances for car loan approvals.
There are a number of reasons these consumers turn to us.
We know the difference
While hundreds of dealers advertise "bad credit, no credit, no problem", quite a few of them turn out to be small used car lots doing in-house car financing. These dealers typically don't report loans or payments to the credit bureaus so that while their customers may have transportation, any positive activity will not appear in their credit reports and, in most cases, these borrowers will be in basically the same credit situation the next time they need an auto loan.
In addition, a high percentage of BHPH loans are made at small used car lots that are not associated with a franchised new car dealership. The vehicles on these lots are usually older, high-mileage cars that are often unreliable. Not only that, but if these cars do have a warranty (they usually don't) it's usually very limited while covering just a short time and/or mileage period.
At the same time, many franchised new car dealers don't want the hassles they believe are associated with customers having near-prime or subprime credit. In all fairness, this is often due to the fact that, unlike traditional auto finance, dealership employees that work with high-risk lenders need special training.
Add to this the need to stock the right kinds of cars for subprime customers and the result is that many new car dealers conclude that they don't have the experience or the patience to both maintain a special finance department while stocking the right inventory vehicles.
How to find the right dealers
The good news is that the internet has changed the way borrowers with good to excellent credit buy cars as well as how credit-challenged consumers can find those new car dealers willing to work with them.
For credit-challenged buyers, websites such as ours can match their credit profiles and transportation needs with dealers that not only understand these situations, but are also signed up with lenders willing to consider a broad range of higher-risk borrowers.
These franchised new car dealers offer a number of advantages over BHPH car lots:
1. Buyers typically have a choice of vehicles from a larger inventory.
2. Due to strict lender requirements, these vehicles are either new cars or recent model used cars with lower miles.
3. In most cases these cars are eligible for extended warranties that will cover most, if not all, of the loan term - helping borrowers avoid potentially high repair bills.
4. The lenders report loans and payments to the credit bureaus, helping buyers establish their auto credit and, in turn, raising their credit scores.
How we can help
The bottom line is this: Auto Credit Express specializes in matching consumers with damaged car credit with dealers that can offer them their best opportunities for approved car loans.
So if you're ready to establish your auto credit, you can begin now by filling out our online car loan application.