Credit challenged consumers received some good news last week as Volkswagen announced that it was preparing to roll out a revised certified used car program beginning in the European market
It begins with a reliable car
At Auto Net Financial we believe in working with people who have bad credit and helping them raise their FICO scores and reestablish their car credit – a form of credit repair – by filling out our online bad credit car loan application and financing a vehicle through our nationwide network of dealers that specialize in second chance auto loans.
Along the way, as we’re doing now, we try to provide our applicants with the information they need in order to make educated decisions about the kind of loan they should choose (such as a tote the note loan versus a bad credit car loan). A bad decision at this time could result in a loan they can’t afford which could turn into in a repossession that could lower their credit scores even further.
Due to the cost of new vehicles rising every year, most credit-challenged customers that fill out our bad credit car loan application and get approved will decide that it makes more sense to raise their FICO scores and reestablish their auto credit with a 2 or 3-year-old pre-owned vehicle. With the quality and durability of vehicles at an all-time high, this decision makes sense.
Now those same consumers are faced with another decision: should they buy a regular used car or a certified used car?
News from Volkswagen
Yesterday, Volkswagen announced that it was reorganizing its used car business under the motto “Das WeltAuto. Used cars you can trust. Guaranteed.” The kick-off will begin in Germany on June 1, 2010, followed shortly by Russia, Italy, France, the UK, and the USA.
Certified Used Cars
If you’ve read any of the previous blog articles here at Auto Net Financial, you know how we feel about certified used cars – generally known in the industry as certified pre-owned or CPO vehicles. The fact is, we believe that, for the most part, these certified used cars are a good choice for credit challenged consumers.
Most CPO programs work this way: if a vehicle meets certain age, mileage and inspection requirements, dealers can use these trade-in or lease turn-in (that have been purchased back from the company) vehicles and sell either one with an extended service contract that is very similar to the warranties found on new vehicles – the only exception being that the number of miles and years can be extended past the original warranty termination date to cover additional months and miles the amount of which depends upon the manufacturer and the program involved.
Because of this built-in, manufacturer-backed warranty coverage and other perks (such as roadside assistance), the dealer can (and usually has to because of the additional cost involved) sell these CPO vehicles at a premium over non-certified used cars – the cost of which is something that bad credit buyers should keep in mind when considering the affordability factor of these vehicles.
Although Volkswagen has yet to release any specifics on the new program, Christian Klingler, Member of the Board of Management of Volkswagen AG responsible for Sales, commented about the program in a recent press release, “Das WeltAuto.’ (The World Car) is not simply a new name. Our mission is to deliver the performance and quality our customers expect from Volkswagen for our used cars as well. Going forward, there will be clear standards and a comprehensive customer promise at attractive prices for every used car under the ‘Das WeltAuto.’ brand. And that will apply worldwide.”
Other highlights of the program include even more comprehensive quality checks as well as the ability to “exchange the vehicle if it fails to meet their (customers) expectations.”
Make sure it’s the Volkswagen program
Keep in mind that the program we’re talking about here for bad credit car loan customers is part of the manufacturer’s (in this case, Volkswagen’s) certification program. Just because a Volkswagen dealer advertises a car as certified does not necessarily mean that it is part of the “Das WeltAuto” program. Any dealer can “certify” a car, since the word, itself, really has no meaning. So make sure that the “certified” car you are buying is part of the VW factory program. If not, you may be required to pay for any repairs up front and submit the receipts to the warranty company for reimbursement – a process that is much less desirable.
Choosing the right vehicle
One other thing that we’re more than a little bit nit-picky about around here is keeping your bad credit auto loan payment affordable. Fortunately, at least a couple vehicles fall into this category – even though most VW’s have a lower depreciation rate than many other vehicles in their categories – which makes their used cars more expensive than many other models after two or more years on the road.
Although the Volkswagen Passat, Eos, Tiguan, Routan and Touareg as well as the GTI and GLI are beyond the budgets of most bad credit buyers, the Jetta sedan and especially the Golf are two vehicles that may very well work.
The bottom line
Keep in mind that certified pre-owned vehicles are usually more expensive than their non-certified counterparts. The costs of an inspection, the required replacement of warn and defective parts as well as a fairly expensive service contract all add to the price of any CPO vehicle. Before buying one, it makes sense for credit-challenged customers to do some research and compare the selling prices of both certified pre-owned vehicles and their non-CPO counterparts (priced with a comparable warranty).
At Auto Net Financial we have helped thousands of people with bad, blemished, bruised and tarnished credit buy cars and reestablish their credit at the same time. Our nationwide network of affiliate dealers specializes in bad credit car loans. Out web site will help you determine how much car you can afford and unlike many other companies, our toll free number is listed on our site in case you have any additional questions. When you decide to buy a car, our online bad credit car loan application can be filled out in the comfort and security of your own home.
For more information, visit www.autonetfinancial.com to see what we can do for you.
