Bad Credit Car Loan vs. Guaranteed Car Financing: Saving Money?
You’re in the market to buy a new car, and that’s fine. Today, almost everyone who buys a new vehicle needs 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 your car financing set up and approved before talking to a salesperson, you can walk into a car dealership and get a better deal on your terms without feeling intimidated, regardless of your financial situation.
Knowing that you have certain credit challenges should help you understand the differences between bad credit car loans and guaranteed car financing.
Loans for people with bad credit…
Bad credit car loans are usually available through new car dealerships when purchasing a new car or a used, certified used vehicle. The actual paperwork for financing a car loan is handled by the dealer, but generally the financing contract for a bad credit car loan is sold to another lender. That lender will service and maintain your loan. Loans typically have terms ranging from 24 months to 60 months.The disadvantages of a bad credit car loan are that many franchise car dealers are not set up to arrange these types of loans in-house, and the interest rates and fees can vary widely, limiting your choices for car purchases.
Guaranteed car financing:
This type of financing is offered directly by smaller or independent car facilities and differs from a bad credit car loan primarily in that it is offered directly by Your financing contract is provided by the actual car wholesaler and the loan is paid directly to the car dealer that you have the car sold. In other words, you would finance the purchase of your car from the company that owns the car and sells it to you. Guaranteed car financing is used for the purchase of used or used vehicles and not typically for the purchase of a brand new car or truck. Loan terms are shorter than more conventional auto loans, and they rarely offer terms exceeding 36 months.
The big advantage of guaranteed car financing is that often no credit check is required. Payments are normally made weekly and sometimes in person. One drawback to this type of car loan is that many car dealerships that offer guaranteed car financing will never report your credit to the credit bureaus. As a result, paying on time and developing an excellent payment history will not improve your personal credit profile or credit score.
It is best to start now and see what financing options are available to you. There are excellent specialized car financing services available online today that offer a wide variety of affordable car loan programs; even if you have been turned down for financing or if you have bad credit, bad credit or other financial considerations, you will be amazed at how they can help you. I am in the market for a new car.
You now see that there are major differences between a bad credit car loan and guaranteed car financing and that there are other financing options in addition to these. Get approval first for the best car loan for you, then walk up to the car dealers and negotiate your terms.
And now I would like to invite you to a free resource where you can compare different car loan programs and access the leading networks of car financing companies and dealers that specialize in affordable car loans with bad credit and help people in the US and Canada buy a car with bad credit. credit.