Bad credit car loan shoppers generally begin their search for a new car by visiting their local used car dealers first. This may not be the best idea.
New or used
Here at Auto Net Financial, we know that if you are one of those customers that have had a spell of bad credit, there’s a good chance that when it comes time to buy a new car, you will probably begin by visiting a local used car dealer, either online or by driving out to the lot.
We’re not sure why most customers seem to act in this manner. Possibly they may be thinking that the vehicles they find at a used car dealer may be more affordable. But whatever the reason, the fact is that if you have bad credit, you are more likely to get approved at a new car dealer that specializes in bad credit financing rather than at a used car dealer.
The biggest reason for this is that most of the national subprime auto lenders only partner with new car dealers or very large independent used car dealers. This means that if you visit a franchised new car dealer, more often than not you will have more lenders competing for your auto loan. And, as the saying goes, when lenders compete, you win.
The lender-dealer relationship
Why do most lenders only do business with franchised dealers? There are a number of reasons: Franchised dealers not only have passed a rigorous approval process by one of the OEM’s (manufacturers such as Ford, Toyota or General Motors), each month they are required to maintain certain levels of working capital (money in the bank required to maintain their business). Used car dealers, in contrast, are no under such scrutiny.
In addition, franchised car dealers also are required by their franchise agreements to have repair facilities on site. This means that in addition to performing warranty work and maintenance on new cars, most of them also perform inspections and standard maintenance on their used cars before they are offered for sale to the public (both processes, by the way, are required if they participate in manufacturer-sponsored certified used car programs).
Since not every franchised dealer is able to accommodate customers with bad credit, it is important that you find one that does. Bad credit auto loan services like Auto Net Financial can help you find a franchised dealer in your area that has the lenders in place to service a wide variety of consumer credit situations. Most of these lenders specialize in a small segment of the subprime auto lending market, for example:
• First Time Buyer and No Credit Car Loans
• Bankruptcy Auto Loans
• No Money Down Auto Loans
• Low Income Car Loans
As we see it
In summary, if you have bad credit and need an auto loan to buy a car, you will have more of an opportunity to get a better car and a better loan if you visit a franchised car dealer that specializes in helping people with bad credit, rather than from your local used car dealer.
At Auto Net Financial, our business is to help people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit at the same time. When you decide to buy a car, our credit application can be filled out in the comfort and security of your own home. For more information, visit www.autonetfinancial.com.
