A much higher percentage of indirect lenders choose to do business with franchised new car dealers than with independent used car lots.
Common examples of indirect lenders are Ford Credit, GM Financial, Ally Financial, Toyota Financial and Honda Financial Services although these finance companies don’t necessarily finance people with bad credit.
Buy here pay here in house financing
Some franchise dealers and many independent used car lots offer in house, buy here pay here auto finance as an option. These tote the note dealers lend money directly to consumers, often with weekly or bi-weekly repayment terms. In many cases, buy here pay here dealers utilize a third party to process the loans and collect the payments.
Dealers that offer this type of financing may also offer no credit check auto loans. In other words, if you have a stable job and can afford a car payment they may lend you the money to buy a car without checking your credit report.
If you have bad credit you might be wondering if using a rent to own car dealership will help your credit situation.
We’ve know because we’ve been involved in bad credit auto sales for nearly two decades here at Auto Credit Express. We’ve also helped hundreds of buyers get approved for poor credit car loans .
Our customers know that a tote the note dealer won’t help their credit scores (applicants outside our retail area can use our online auto loans application to find the right dealer near them). We also explain the loan process (showing them how to prevent repossession ).
Rent to own cars
Speaking of tote the note dealers, rent to own cars are very similar and are loans taken out at a rent to own car lot. The loan requires a down payment and a fixed number of loan payments, usually with a small buy-out at the end. Payments are usually due every week and are typically made in person at the lot you rented the car from.
Good Car Dealers for Bad Credit Auto Finance. Buying a Car with Bad Credit
If you're buying a car with bad credit, make sure you go to a good car car dealership for bad credit auto finance. Good car dealers for people ...
Can you get a 2nd auto loan with bad credit?
Aug 30, 2010 by Forrest | Posted in Buying & Selling
Okay here is the Story. My Father and Mother bought a Car a long time back and is still making payments to the bank called "Fire Side" Well Fire Side is going out of business and we can't get another car financed through them. (Fire Side Bank is for people with bad credit) Well my Mother was the co-signer and she passed away in march. My father is still making payments to Fire Side they just wont accept any new customers or accept any other cars on the loan. So let me get to the point. My Father has bad credit And has a car loan. I am not 18 to be able to co-sign and we live in Utah and don't know anyone that will Co-sign. I have a job so does my dad. We would have no problem making payments on another car cause it would be me paying for it just under my fathers name. The thing is, he have been declined by a couple car dealers cause of the loan we have are other car. Is there a bank out there that Accepts people with a loan out WITH bad credit and won't need a co-signer? Please no rude comments.
Its only going to happen with a HUGE down payment or at a buy here pay here dealer.
Here is how buy here pay here car dealers operate
You will often get a car that is worth (At wholesale) not much more than your down payment yet you will owe many thousands more plus a high rate of interest.
For example, if you put $800 down, you might get a car with a wholesale value of $700-1200 and your balance to be financed will be $3500-3900 or more. Plus interest at 21-29%.
On somewhat nicer stuff, say $1500 down, you might get a $2500 wholesale unit
Yet owe $5900-6900 more plus interest. And at 21-29% that interest can REALLY add up.
Most cars are sold as is. Any "service contracts" they sell are usually worthless too.
More often than not, the car will break down sometime before its paid off and many buyers stop paying. The dealer repos it and reports the repo on their credit which ensures continued bad credit for another 7 years.
So, TRUST me when I say your best bet is to save up $1200-2000, shop around for a really good deal from a private party, have an independent mechanic check it out only AFTER you are sure you want it and have agreed on a price. Then have him make sure its a good car.
There is no such thing as a "good deal" at a buy here pay here car dealer.
If you pay as agreed, you are making up for all those who do not.
And BHPH dealers often know nothing or do nothing to their cars. They go from Auction to their lot to you. They have no idea whats wrong or might go wrong soon. And they don't really care.
With bad credit,(Or no credit or cosigner) you simply cant afford to borrow....for ANYTHING.
Really, the dealers arent to blame. They have to charge what they do to make the business viable.
| Aug 30, 2010
Auto Loan with large Down Payment for Bad Credit?? Good interest rate??
Apr 03, 2008 by bryanlamb2007 | Posted in Buying & Selling
I have heard from several people that if you have a large down payment (such as 40% to 50% of the purchase price), you will be able to get a good interest rate from nearly any dealer/lender. Is this true??
I was looking at getting a 2009 Acura TSX, my credit is bad (540, nothing new though), and I have $20,000 cash. No, I'm not going to buy a used one. I want brand new and total price will be about $35,000 including tax, title, license, accessories, and rims. So that would be a $15,000 loan with $20,000 down.
Would I still be subject to high interest rates, or is it true that lenders will give you the preferred rate for such a low LTV on the car??
Thanks!! I hope some auto finance people respond....
Capital One Auto online helped me.
take a bow | Apr 03, 2008
I used to sell new and used cars for 3 years. In my experience a larger down payment will allow you to get a better interest rate. In addition to that, seek a loan directly from a CREDIT UNION, not a bank. credit unions are non-profit and generally have lower rates. avoid getting loans from dealers if possible. in some states the dealer is allowed to inflate the interest rate from a bank inorder to get profit in the financing. the only situation in which you should finance through the dealer is going directly through the manufacturer, ie.... honda finance in this case. hope that helps.
jeff g | Apr 03, 2008
as a rule they will work with you.if they don.t
go to a other dealer,who will.with a big down
payment you should be OK.it depends on who is financing it.
Maurice w. | Apr 03, 2008
You'll definately get some preferred customer treatment due to your large down payment. And yes that could mean that your poor credit will take a back seat. But check out this site for more info:
http://www.find-cheap-used-cars.com/used /buy-used-car.php
Hazel S | Apr 03, 2008
If you have a bad credit history still the loan market place is full of lenders who are ever willing to offer you a fresh loan. But you should be meeting some conditions laid down by the lenders. Loans for bad credit people are in fact easier to get then they were ever before, thanks mainly to cut-throat competition amongst the lenders. Lenders are giving loans to the bad credit people who have late payments, payment defaults, arrears, county court judgments or any credit problems. These loans are available for any purpose like home improvements, purchasing a new or used car of your choice, for wedding and holiday tour, debt consolidation or for paying child’s tuition fees.
Every lender in approving loans surely likes to see if the bad credit borrower has sufficient capacity to repay the loan in timely manner. If the borrower earns well, has regular bank balance, has been an employee for some years and has a convincing loan repayment plan in place, then the lenders do not usually hesitate much. So ensure that you have adequate repaying capacity before applying for a loan. Also, you should first check your credit report for any errors. If your credit score is too low then you would be charged a very high rate of interest. So it is advisable to first pay off some easy debts to improved credit score and then you should apply for loan at better rates.
Sep 13, 2010 by Rosaura Jimenez | Posted in Maintenance & Repairs
Back when I worked at the restaurant as a cook, I bought a 5 speed Ford Escort. Everything was always worng with that car. I often had someone drive me to the auto parts. Then I got rid of it and bought a Toyota. I never had problems with it. I now own a Honda and I gotta say that it is a very reliable car. When They say (F)ix (O)r (R)epair (D)aily I gotta tell you that there's some truth to that. Whenever you see a car broken down on the side of the road and a guy workin on it I bet you 9 out of 10 times it will be a Ford truck or car. So I don't get why people buy them? Everyone keeps talkin about how bad those cars are. Everyone who has a Ford should get rid of it and go to their local Honda dealer today for a reliable Honda that will last you. And by the way Ford was the first car company in the US but not in the world. People keep giving them credit for being the first car company but it wasn't. Look it up.
I agree with you. Hondas are very reliable cars. Fords are for people who wanna learn to be a mechanic. By the time you reach 1,000 miles on it you will learn to basically build the car.
| Sep 13, 2010
Is there an actual legitimate question here? Nobody cares about your skewed "opinion".
Otto | Sep 13, 2010
You bought a F'n escort. I wouldn't even tell people that. You get what you pay for no matter what the make and model are. Splurge a little and get a Mustang.
To mr SS.... Got news for you; Chevys are not built in the US. The only car solely built in the US is the Honda Civic. Camaros are straight Canadian.
Clint is Sexually Confused | Sep 13, 2010
you bought an old car. what do you expect.
MCXD | Sep 13, 2010
How things change...
...now Ford Fusion [and Focus, I think] ranks very hi on Consumer Reports. org's reliability list, and Toyota's are untouchable unless you enjoy playing Recall of the Week; and I've owned two, most recently a used 2002 Sienna mini van which I had no probs w/.
Good to stay current.
Minister of Truth | Sep 13, 2010
I bought a Honda, and still own it. Let me see, it has had the transmission, engine replaced and needs bearings put in it for the wheels. I had to fix a factor harness because the wire was not put into the factor harness before it was crimped. The body is tearing at the places the hinges mount. The turn-signal switch came apart because the pin was not seated right, which also disabled low beams at the same time. It has a new alternator, starter, power steering pump and water pump.
Sitting right beside it are my Fords, and Mazda products. Both older and more reliable. Yes the Ford got a new water pump some time back. But is also a 1975, and that is all that has gone out on it.
So I continue to buy Fords, because I find Honda's to be junk!
Old Man Dirt | Sep 13, 2010
The issue was you bought a 5-speed escort. That must have been the extreme cheapest new vehicle sold at the time.
Tommyyyy | Sep 13, 2010
I've had some Hondas, and there's a good chance you'll need a transmission right after 100,000
miles. Won't buy another one...
Michael B | Sep 13, 2010
Better to buy any american car than a foreign car as most of the money goes back to the foreign country when you buy a foreign car even though some are made in the U.S.
mister ss | Sep 13, 2010
Interest rate on new car?
Jul 13, 2008 by nellie | Posted in Buying & Selling
Today I went to a auto dealer that has the moto of no haggling on price. I have read many good reviews in yahoo and on kelly blue book. So I went to the nearest dealership in my area. I won't mention the car type as it is obvious. My credit is perfect yet when the saleman worked up a monthly payment it seemed teriblily high. I asked him what rate he use and did not say but rambled on to avoid telling me. I then told the guy about all I would pay per month plus my down payment. Which after doing research on the internet felt was about fair. They then try to tell me for the amount I could offer they would put me in a much lesser car. After a few more minutes of listening to then the finance guru I decided to leave. I got home and ran a calculation and they were using a 12 percent finance rate. For someone with excellent credit and needing about 25-30 thosand dollard what do you think is about the going rate now? Also, I feel bad for hard working people that get suckered.
834, WHATS YOURS?
Dealerships get back part of the intrest rate from the lender, so they try to stick you with the highest rate possible. There are 3 rates: Bank rate, Dealer rate, and Consumer rate.
The fact that they would not tell you the rate means they are shady lying crooks. Always work the numbers using the purchase price figuers, never with monthly payment figures, as you just learned.
I've found that if I can't deal with them within 20 minutes of walking in the door, then they are not there for honest business.
You can go to many banks and get your own car loan money. In fact, I just went to Capitol One Auto, applied online and got 6%.
New York Times (blog)The process can be started by filling out our auto loans for bad credit application. Unlike tote the note car dealers, dealers in our network offer second Bad Credit Auto Loans plus Credit RepairCar Loans for Bad Credit and Credit Monitoring3 Tips For Saving Money When Buying A Car With Bad Credit Auto Loans - -all 42 news articles »
*Many of our people are here for 8,10,12 years. *Great area: Nice mix of bad credit, good credit. Unemployment lower than the country. *Located on auto row,
By filling out the online bad credit auto loan application and getting approved at an affiliate dealer for auto loans for bad credit, you can return to good and more »
Technorati (blog)At Auto Credit Express we have helped literally thousands of people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit How to Get a Student Loan with No or Bad Credit HistoryHow you can get easy auto loans onlinePrivate Party Auto Loans Offer New Options for People with Bad Credit or Poor -all 22 news articles »
Star Global Tribune (blog)If this happens, the only remaining choice for most people is a tote the note car dealer. It also means that rebuilding your car credit has to be put on Car Loans with Bad Credit and FICO ScoresUnderstanding the Buyers guide in a Bad Credit Auto LoanUsing the Internet to Find Bad Credit Auto Loans - -all 51 news articles »
New York Times (blog)The process can be started by filling out our auto loans for bad credit application. Unlike tote the note car dealers, dealers in our network offer second Bad Credit Auto Loans plus Credit RepairCar Loans for Bad Credit and Credit Monitoring3 Tips For Saving Money When Buying A Car With Bad Credit Auto Loans - -all 42 news articles »
Technorati (blog)At Auto Credit Express we have helped literally thousands of people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit How to Get a Student Loan with No or Bad Credit HistoryHow you can get easy auto loans onlinePrivate Party Auto Loans Offer New Options for People with Bad Credit or Poor -all 22 news articles »
Star Global Tribune (blog)If this happens, the only remaining choice for most people is a tote the note car dealer. It also means that rebuilding your car credit has to be put on Car Loans with Bad Credit and FICO ScoresUnderstanding the Buyers guide in a Bad Credit Auto LoanUsing the Internet to Find Bad Credit Auto Loans - -all 51 news articles »
