“If I have bad credit should I try to get a new or a used car?” This is a commonly asked question. Mostly because people like new cars. Who doesn’t like that new car smell, after all?
5 or 6 years ago I would have said that financing a used car was the best route if you have bad credit. But times have changed and a new car might just be a wiser choice.
Car manufacturers try to sell a certain number of new cars every year. This keeps the economy rolling with new car manufacturing and provides a lot of jobs here in America. To keep those new cars rolling off the lots the manufacturers have had to resort to a lot (and I mean A LOT) of very high rebates. So suddenly that Silverado that costs $30,000 is rebated down to $24,000. That’s incredibly affordable.
To make up the loss (because it IS a loss) they will try to add a couple percentage points to your financing. And someone with bad credit is just ripe for the plucking here! That’s why pre-approval before car shopping is so very important.
How does the dealership make money off financing? Here’s a simple explanation:
Let’s say that “Joe” wants a new truck and the price is $24,000 after rebates. The dealership runs his credit and the bank approves Joe at 9.95%. The sales manager writes down that you are approved for 12.95% and runs payments based on this. If you bite he just made a profit off you because he gets to split that extra 3% with the bank. So if the payments were $100 higher the dealership gets $50 each payment x 60 payments, that’s an extra $3,000 for them and $3,000 for the bank.
Bottom line: A new car purchase might just be affordable to you with the great rebates many manufacturers are offering, but you’ll lose any benefit of those rebates if you don’t walk in pre-approved.
As a former car salesperson this was the number one question in every sale. It’s definitely on everyone’s mind when financing a car. Especially if you’re a first time buyer or your credit is less than stellar.
Today I thought I’d help you out by providing the following car payment calculator:
Playing with different amounts and payments is helpful when trying to decide what car to buy. However there’s something else that’s more important. Pre-approval.
While it is important to know how much your payments will be, keep in mind that the salesperson and managers job is to keep you focused on payments, because these can be manipulated without changing the price of the car. Your job is to keep them focused on the price of the car. This is what should determine your payments.
This is the primary reason we tell you to walk in pre-approved! They can’t manipulate the interest rate if it’s fixed already. Which means then it’s up to you to pick the best car in your price range and negotiate that price down!
Watch this video to learn more about how car dealerships want to trick you into giving them more money!
With a pre approved auto loan you have the assurance of knowing that the financial side of your problem is taken care of. This allows you more flexibility plus spending power freedom while exploring your car options.
A major benefit of a pre-approved loan is the ability to actually unleash your spending efficiency. With approval for such loans you know the amount you are approved for, you’re then free to pick and choose the most appropriate auto for your particular requirements from the dealer of your choice.
By knowing your financial plan and spending limit in advance this puts you in a much better situation than just going blindly shopping and allowing the dealer to put you into something you really can’t afford. Chances are you have already had a dealer try this on you before. Searching for the best auto at the affordable price is made a lot easier and less demanding as you have already effectively secured the repayment arrangements. By being pre-approved you’re able to fully make use of your spending capacity.
There is a good range of competitive pre-approved car loans obtainable on our site. You should apply for one of these helpful auto loans, get pre-approved and enjoy the car shopping experience.
Applying is simple, quick and convenient online through fast decisions and payouts along with high approval rates. Anyone over 18 with a provable earnings and bank account should apply.
You are in the driver’s seat when it comes to bargaining the best deal for the car you wish to purchase. Check out our pre-approved lenders and let them show you how easy and simple it really is.
Get pre-approved for a car loan today! It’s easy, simple and fun; once you are pre-approved you will wonder why you didn’t do this sooner!
