Bad Credit Auto Financing & Getting Lower Interest Rates

Bad credit auto financing is puzzling to many people. It’s very confusing to people that don’t understand how it works and how to get a good deal other than what their dealer is offering. People walk out of dealerships everyday thinking that they can’t get approved or that they have to pay a skyhigh interest rate.

It doesn’t have to be that way…

If you know a few things about bad credit auto finance, you understand that you can in fact get an auto loan on most any vehicle, regardless of your credit. You may not get approved for a $50,000.00 Mercedes Benz, but a good vehicle is very doable if you have bad credit. You can also get that loan for a much lower interest rate and lower payments than the typical dealer convinces you of.

You see, auto dealerships make money not just on the price of the car, but on the interest rate that you agree to.

Yes…

Dealers make money by raising your interest rate above and beyond what the loan company approves you to have to pay. If the loan company approves you at 9%, the dealer will mark up your interest rate by up to 5 or 6 percentage points. How much would you save if you could get that loan at the 8% vs 16%?

A TON of money…

You don’t have to use the dealership finance department and in fact, if you’ve got bad credit you should avoid it altogether. Car dealers know that if you’ve got credit problems, you’ll likely feel more desperate to get approved and will sign anything.

Bypassing the typical dealer finance department involves dealing with financing companies directly that specialize in bad credit auto financing. This allows you to choose to buy cars at a dealership or save even more money by buying a car for sale by a private owner. There’s no sales tax on private owner car sales and with a lower rate as well, you’re payments will be dramatically lower than if you bought from a car dealership.