You’re in the market for a new car and that’s great. Today, most people buying a new vehicle will need some form of auto financing, and if you find that your personal finances or credit aren’t perfect, you can still get very affordable auto financing if you know how.
An informed car buyer is a smart car buyer. When you know your car financing options and have set up and approved your car financing before talking to any salesperson, you can walk into a car dealer and negotiate a better deal on your terms without feeling intimidated, regardless of your financial situation.
If you know you have certain credit challenges, you need to understand the differences between bad credit car loans Y secured car financing.
Auto loans with bad credit…
Bad credit auto loans have generally been available through new car dealers on the purchase of a new car or certified pre-owned vehicle. The actual auto loan financing paperwork is handled at the dealership, but generally, the bad credit auto loan financing contract is sold to another lender. That lender will maintain and service your loan. The loans usually have a term of 24 months up to 60 months. The downsides of a bad credit car loan are that many franchise car dealers are not set up to arrange these types of loans in-house, interest rates and cost can vary widely, and limit your car buying options.
Guaranteed Automatic Financing…
Secured auto financing differs from a bad credit auto loan primarily in that this type of financing is offered directly by smaller or independent auto facilities. Your financing agreement is provided by the actual wholesale car dealer and the loan is paid directly to the car dealer who sold you the car. In other words, you would be financing the purchase of your car from the company that owns and sold you the vehicle. Secured auto financing is used for the purchase of used or pre-owned vehicles and generally not for the purchase of a new car or truck. Loan terms are shorter than more conventional auto loans, rarely offering terms longer than 36 months.
The great advantage of secured auto financing is that a credit check is often not required to obtain this financing. Payments are normally made weekly and sometimes in person. One drawback to this type of auto loan is that many auto dealers that provide secured auto financing will never report your credit to the credit bureaus. So if you make regular payments and establish a great payment history, it won’t improve your personal credit profile or credit score.
Your best approach would be to start now and see what financing options are available to you. There are great specialized auto finance services available online today that offer a wide range of affordable auto loan programs, even if you’ve been turned down for financing or have poor credit, bad credit or other financial considerations, you’ll be surprised. how they can help you buy a new car.
Now you see that there are big differences between a bad credit car loan and secured car financing and that there are other financing options besides these. Get approved for the best car loan for you first, then approach car dealers and negotiate your terms.