Car Loan

You’re sitting at the computer wondering what you’re going to do and where you can go to get approved for a car loan with bad credit.

That’s what I’m guessing.

Well, sit back for a moment, grab a cup of coffee and let me explain to you how this works.

First of all, if you have a job, are over 18 and are not currently in a bankruptcy, there’s a 99% chance that you can get approved if you take this article to heart. From years of experience in the car business and helping good people with credit problems get approved, hear me out.

How Dealers Make Money

Dealerships buy cars for less than they sell them for. The difference between cost and selling price is profit. But, that’s certainly not all. More money is made on car LOANS that the dealership gets approved, than on the selling price of the car. When a credit application is submitted to finance companies by the dealer, the approval comes back with a “buy rate”. The dealer then adds interest rate points to the buy rate, which is the “sell rate”. So if you’re approved at 10%, your loan contract may be for 15%. The 5% difference that the dealer marks up the interest rate, is profit. This profit is paid by your payments being “jacked up”.

More profit is added to the car sale by selling you an extended warranty. It’s common that an extended warranty being offered to you for $899.00 will only have a dealer cost of $300.00, thus producing $599.00 of profit for the dealership and all the finance manager had to do was ask if you’ld like an extended warranty for only $15.00 more a month. 

So, even if the dealer doesn’t make any profit on the sale price of the car, by the time you get through the finance department, you’ll be paying about $50 to $150 a month of your car payment in dealer profit.

How To Avoid This

So you can see that getting your bad credit car loan through a dealership is not a good deal for you. If you have bad credit, the last thing you need is higher payments, or someone trying to take advantage of your “need” to get approved.

As dealers make money on bad credit car loans, loan companies are more hesitant to approve customers through dealerships than they are if dealing with a customer directly.

Imagine if you were able to bypass and go around the dealer interest rate markups. Your payment would be lower, right? Wouldn’t it be easier to get approved for a lower payment? Wouldn’t you be able to save alot of money.

What Most People Don’t Realize

Getting approved for a car loan with bad credit is easier than you think. You’re only discouraged because of what car dealerships have told you. Do you really believe that they are the ultimate authority on car loans? 

Absolutely, not.

Bad credit car loans are easily obtainable if you deal directly with a loan company that specializes in getting good people approved that have bad credit. After all, you’re not asking for a check… you’re asking for a SECURE loan. A car is collateral. See my point?

So, you need to work directly with a lender. They’ll walk you through selecting a vehicle and tell you if the car is really worth what you’re being asked to pay. They don’t want you to owe much more on it than it’s worth, because that helps keep the loan vs value more in line.

Regardless of repossessions, bankruptcies or a host of other common credit problems, you will get approved if you seek to work directly with a loan company. Many of these sources are online.

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