For many of us with a poor or low credit score, auto financing takes on an entirely more difficult scenario. No longer are we, the buyer, in the driver’s seat - in fact, it can be so bad that we are not only did we forfeit the driver’s seat, we are not even in the car anymore! Scams played on car buyers with low credit are extremely prevalent and can not only cost the buyer money but steam roll them into a situation where they fall farther in debt and their credit rating drops even farther.
Car dealerships are out for one thing - themselves! With the economy in a topsy-turvy state, new car sales are down and with the price of gas on the rise, fuel-thirsty truck and SUV sales are plummeting. This trend will only make car salesmen and their employers even more cutthroat and the easiest targets are the people requiring low credit auto financing. Dealerships will do just about anything to make a sale and that includes not paying off loans on trade-ins as promised, charging up to 3% more by hiding it in extra costs and contacting the purchaser two weeks after the sale of the vehicle to tell them their APR financing did not go through but they have found another finance company to take on the loan although at a higher interest rate of course.
So how do you avoid these scams? The best way is to work to increase your credit rating before you even start to look for a vehicle but sometimes that is not possible - you need a car to get to work or school and there is no time to wait to repair your credit history. If that is the case, working with an independent auto financing company can make purchasing a vehicle much smoother as their one job is to get you a vehicle loan that fits your budget and needs perfectly.
One of the most important parts of buying a vehicle from a dealership is the ability to walk away from a deal and know it is up to the salesman to come down to your price if he wants to make that sale. However, if the only place you are qualified to get financing is Joe’s Car Lot then Joe knows he can ask anything he wants for his vehicles while you have to just suck it up and pay the price. But what if you walk onto Joe’s lot with a car loan pre-arranged through an independent auto financing agent and low-ball him on the asking price of a vehicle? He will laugh and snort and say he can’t possibly let this beauty off the lot for that price! You hand him your card and tell him to call you when he comes to his senses. Will you get the best price possible from Joe once he calls you back? You bet! In the long run, independent auto loan financing offers you this ability, saving hundreds if not thousands of dollars over time and it is all based on the ability to walk away.
That is not to say that low credit auto financing will not cost you more in interest then regular loans or financing - it will. The rule of thumb is the higher the risk, the higher the interest rate. But if the initial outlay is not as much, it all balances out in the end. Better yet, when Joe the used car salesman calls you back saying he will come down to your price, you will drive away in your new car with a smile on your face at the great deal you just made
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