Buying a car with bad credit
It's very important you understand how the process works before you start to phone or visit dealerships.
Many buyers with blemished credit or no credit rating concentrate only on being approved , type of vehicle and affordable payments , dealerships knows this and will maximize for profit...you will most likely have paid full asking price for vehicle plus having an extended warranty - perma shine - life insurance - and whatever else aftermarket the dealer can profit from...IF YOU FALL INTO THIS CATEGORY you will never re-establish your credit
Every dealer will claim to be the best and will get you approved, you seen the adds
Bankrupt...Collections...100% approved call now...Guaranteed credit approval...Have credit issues...Need wheels...Judgements...Have a job, your approved...Been turned down elsewhere...New job...Slow Credit...Loan defaults...Owe to much on trade...24 hr hotline...We get you approved...New to country...Phone or internet approval within hours...Bad credit no credit...New to country...Approvals from $.0.00 down and 0% interest rates...Divorced-Seperated... Have a Job ? Steady income ? Stable residence YOUR APPROVED
But the sad truth is dealerships whom advertise and claim they will get you approved no matter how bad your credit deal with high volume, and know if you throw enough sub-prime credit applications agains the wall something will stick, even if its only 10% it will cover all advertising and still show a huge profit.
Many advertisements by dealerships will have a Hot line phone # for bad credit or ask for ***** don't you for a moment believe that makes them experts getting you approved... its the complete opposite, you make contact this way and before you even cough they know your calling about bad credit. EXAMPLE...you phone and ask for Mary - thats the code name for bad credit enquiry or the special phone # your calling will be turned over to the dealers credit specialist, he/she is called the specialist because they got absolutely no compassion, and trained to make huge profits, don't make contact this way with a dealership, you will stay burried forever. I will be adding techniques how the dealer specialist deal with you...(bookmark site )
Beware Whom you contact for an Auto loan
For you to get approved the lender will run a credit report ,if you have been to 5 other dealers or online lenders and been turned down each inquiry will show on your credit bureau and the more inquisitions on your report card the less likely the current lender will approve you, its like saying to the loan officer whom has to make a decision why should i put my job on the line when the guys down the street did not , its vital you hook up with the RIGHT lending institution without to many credit checks, my choice is Automotive.com Bad Credit? No Credit? Auto Loans...Contact Us!
Best Lie Dealers Tell Buyers with Bad Credit
Drive this car 6 months to a year make payments on time and your credit will improve, then buy what you really want ...That is the # 1 lie many dealers tell consumers with blemished credit whom are getting jammed with a vehicle they really don't favour along with interest rates 15% to 29% and most likely any other after market the business manager can profit from
EXAMPLE...You buy a car $ 12000. with little or no down payment with a 60 month term you return to dealer after one year having made payments on time and lets assume your credit score has improved a notch, I say assumed because 99% of the time it has not. Take away from the $ 12000. taxes - dealer profits - vehicle depreciation and my guess will be close to you trading a vehicle worth about $ 6000. and with the high interest you been paying you still owe over $ 10.000. that is about $ 4000. negative.
Sure, you can trade your vehicle provided you have saved an extra $4000. because that is the approx negative factor. did the scumbag seller disclose this fact
It gets worse, drive the same car 3 years and you will still owe about $ 6000. on a car that's most likely worth $ 2000. or less
How to Deal with a Vehicle being Upside Down
A high Interest rate is the most likely cauce for being upside down because the major portion of the monthly payment goes toward the Interest rate and not the depreciation factor, end result being upside down.
There is no escape from this messy situation, going to a dealership is not the answer, dealerships have no compassion, they will try to get you refinanced with the negative factor build into another loan, if they succeed getting you financed end result will be " YOU " owing thousands on a clunker that's worthless.
OPTIONS, going bankrupt is a nasty way out as it will take years to reestablish a credit rating, make the vehicle last till it's paid in full is a valid option, and then pay cash for another vehicle if your Interest rates are high, or buy the least expensive transportation if you're financing with high rates, if your emotions take over you will end up with fancy wheels, but you will be back to square one.
SUMMARY,,, If you been making payments on time for over a year and stuck with upside down payments, your best approach will be trying to lower the Interest rate, contact lending institutions, start with where you do your banking, lay your cards on the table, you want to refinance the loan to get a lower rate to pay out the lien and get your feet back on the ground.
