It’s great that you’re in the market for a new car. Today, most people who buy a new car will need some kind of auto financing. Even if your personal finances or credit aren’t perfect, you can still get car financing for a low price if you know how.
A smart car buyer is one who is well-informed. You can walk into a car dealership and negotiate a better deal on your terms without feeling intimidated, regardless of your financial situation, if you are aware of your auto financing options and have your financing set up and approved prior to speaking with any salesperson.
You should be aware of the distinctions between guaranteed auto financing and bad credit car loans if you are aware of certain credit challenges.
Bad Credit Car Loans… New car dealerships typically offer bad credit car loans for the purchase of new or certified pre-owned vehicles. The dealership handles the actual paperwork for the auto loan financing, but the bad credit car loan finance contract is typically sold to another lender. Your loan will be serviced and maintained by that lender. The typical length of a loan is 24 to 60 months. The disadvantages of a bad credit car loan include the fact that many franchise car dealerships are not equipped to handle these kinds of loans internally, that interest rates and costs can vary widely, and that your options for purchasing a car are limited.
Guaranteed Auto Financing… The main difference between this type of financing and a bad credit car loan is that it is provided directly by smaller or independent auto dealers. The actual wholesale auto dealer provides the finance contract, and the loan is paid directly to the wholesale auto dealer that sold you the vehicle. To put it another way, you would get financing for your new car from the company that owns it and sold it to you. Used or pre-owned vehicles are typically purchased with guaranteed auto financing rather than brand-new automobiles. They rarely offer terms longer than 36 months, making their terms shorter than those of more conventional auto loans.
The fact that there is typically no need for a credit check to obtain guaranteed auto financing is the main benefit of this type of financing. Most of the time, payments are made weekly, sometimes in person. One drawback of this kind of auto loan is that many dealerships that offer guaranteed auto financing will never report your credit score to the credit reporting agencies. Therefore, improving your personal credit profile or credit score will not be reflected if you consistently make payments and establish a strong payment history.
Start now and investigate your financing options to determine which one is best for you. Even if you’ve been turned down for financing or you have poor credit, bad credit, or other financial considerations, there are excellent specialized auto financing services available online that offer a variety of affordable car loan programs. You’ll be surprised at how they can help you buy a new car.
As you can see now, there are significant distinctions between a guaranteed auto financing option and a bad credit auto loan, as well as additional financing options. First, make sure you are approved for the best car loan possible, and then go to the car dealership and negotiate your terms.
