Dealership Financing Ė Donít be an Ignorant Bad Credit Car Buyer

By: Kaitlin Miller


Car shopping is fun but waiting for car loans isnít. Many car buyers wait for months to get car loan approval. However, there is a way to complete your car buying and car loan shopping quickly. Dealership would certainly save a lot of time and save you the trouble of rejection from traditional banks and lenders. Donít take tension of your bad credit score because dealerships have experience of working with sub-prime borrowers.

Although dealerships are available in almost every town and city, car buyers stay away from them. There is a constant fear of deception and fraud. But, you must understand that dealers cannot continue their business if they cheat customers. And, most buyers are cheated because of their ignorance. Donít be an ignorant bad credit buyer. Know how to tackle dealership financing and emerge successful in the car buying pursuit.

What you need

Know your requirements. You should determine the kind of vehicle size and performance you want. Also, donít just select one car. Keep two or three options with you. It will help you when your most preferred car is out of stock.

Donít be Ignorant

Ignorance about credit score is the most common cause of dealership frauds. Dealers justify higher rates by explaining you about your terribly bad credit history. But, in reality, the truth may be different. So, it is very important to know your current credit score. Your credit score may have improved over the time. If you remain unaware of your credit score, you will give dealers a chance of offering you higher rates.

It is also important to do your homework before visiting the dealer. Prepare a budget. Calculate your debt-to-income ratio and ascertain whether you will be able to manage the additional debt. It will help in choosing the best bad credit dealership financing deal for you.

Be Clear not Desperate

You need a car, but your neediness shouldnít reflect in your communication with the dealer. If he comes to believe that you are in desperate need of a car, he will provide approval at higher rates. He may try and sell you a disastrous car. So, make sure that you visit a dealership with a practical approach and not an emotional one.

Matters of Money

Donít confuse the Maximum Suggested Retail Price (MSRP) and the sticker price. MSRP is the price that the manufacturer recommends the retailer to sell. The sticker price is the amount that the dealer is looking to get on the automobile. It includes the cost of the car plus the dealerís profit. Often, dealers list MSRP on the car as well as the sticker price. They manifest that the sticker price is lower than the MSRP and give you a feeling that you are getting a profitable deal.

However, you can negotiate the dealer for a price below sticker price. Tell them that you know about the manufacturer incentives offered to dealers. Most car buyers donít know about this. But, you can ask the dealer to pass on some amount of the incentive benefits to you. Also, check for customer cash/rebate programs. Such programs will reduce the price.

Donít get lost in Numbers

Many dealers believe that car buyers have the memory of a goldfish. So, they try to confuse you with numbers. They ask your budget and start confusing you with discount rates, MSRP, down payment ratio, interest rates, monthly payments, etc. Donít fear this number-dumper.

When the dealer starts his number game, ask him to give you loan rates and everything else in writing. Also, ask for incentives. Go home and study them. You can use online car loan calculators to calculate your exact monthly payments and total interest amount. Take the decision only when you have considered everything in detail.

The Coin lying around

If you have spare money, you can use it as down payment for securing bad credit dealership financing program. Inform the dealer that you are ready to make a down payment. Tell him that you want the advantage of reduced price against it.

Donít worry if you do not have cash to make a down payment. If you have an old car lying around, you can sell it and use the money. Another alternative is trade-in. But, do remember to calculate the resale value and trade-in value of your old car. This way you will be able to make use of your car in the most profitable way.

The Most Crucial Thing

Most importantly, donít become relaxed after you get auto loan quotes from the dealer. You must analyze them. Many dealers let you believe that you are getting the most affordable loan program. They tell you how low your monthly payments are. But, you must not concentrate on monthly payments only. Calculate APR. It will show you the annualized cost of the loan. It includes the car loan amount, rates, plus other expenses. It will give you a better idea of the loan quotes.

If you are fine with loan quotes, concentrate on the loan contract. Check that everything you negotiated is there in the contract. Donít believe anything unless it is in writing. If you have any doubt, clear them with the dealer. Sign only when you are fine with every term of the contract.

Remember that you will get the best bad credit dealership financing program only when you are calm and cautious. So, donít worry. Go out there and buy the car of your choice. You are ready for dealership.

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