Both Experian and Carfax add cash for clunkers vehicle information to their databases which should help protect many bad credit car loan buyers from potentially fraudulent transactions.
Used cars and bad credit auto loans
At Auto Net Financial, we focus on consumers with bad credit by helping our applicants raise their FICO scores and reestablish their car credit by financing a vehicle with a bad credit auto loan. Along the way, we try to educate consumers on the bad credit loan process, since any misstep and they could find themselves trapped in a loan they can’t afford or paying on a loan that isn’t reported to the credit bureaus.
From our experience, we know that most of these bad credit auto loan applicants will end up purchasing a used car. The main reason for this fact is the relative affordability of used cars. With most new cars losing between 15% and 30% of their value to depreciation during the first year, alone, a one, two or even 3-year-old vehicle makes sense as it keeps the overall purchase price down while minimizing the overall higher interest rate expenses of a second chance car loan.
The downside to purchasing a used car is that these vehicles are not covered by state lemon laws and, secondly, there are still unscrupulous sellers who will try anything to make a quick buck, including title washing – a practice designed to erase the history of vehicles that may have previously been issued a “salvaged or “flood damaged” branded title.
No cash for a clunker
Unfortunately, the recent “cash for clunkers” program offers these same individuals the opportunity to re-sell a vehicle that, according to federal law, must either be disassembled and parted out (except for the engine and drivetrain) or sent to the crusher. In anticipation of this scenario, both Experian (through their AutoCheck product) and Carfax have added the vehicle identification numbers (VINs) of every car included in the CARS program to their databases.
“Carfax is committed to helping combat fraud so that our customers can buy and sell used cars with confidence,” said Larry Gamache, communications director at Carfax. “Including this information in Carfax Vehicle History Reports has been a top priority for us. With great partners like NHTSA, we’re making sure these cars that should be in scrap yards don’t wind up in someone’s driveway.”
“Whenever there is the chance that the used car one hopes to buy isn’t reliable or safe, all trust in the sale is lost,” said Scott Waldron, president of Experian Automotive. “That is why we’ve made it quick and easy to identify if a vehicle was one of the nearly 700,000 meant to be scrapped under the CARS program, so buyers can feel more confident and informed about their used-car purchase.”
“The addition of the Cash for Clunkers designation on our AutoCheck reports is a great example of our commitment to constantly invest and improve our product to meet the needs of our customers,” Waldron continued.
The Bottom Line
At Auto Net Financial, we realize that with the high cost of bad credit car loans, bad credit car loan shoppers need to be extra careful when choosing a vehicle. By including the “cash for clunkers” information in their databases, both Experian’s AutoCheck program and Carfax will help insure that the used vehicles customers buy are not those that should, instead, be relegated to a junk yard.
