Bad Credit Zero – Down Auto Loans – An Unpleasant Reality For Car Dealers


Your credit needs serious repairs? So does your car? If so, you are one of many troubled borrowers trying to get out of destructive circle of pumping money into and old vehicle and being unable to save for a down payment on a new car. Most bad credit borrowers give up on their hopes of getting a late model vehicle after being confronted with large down payment requirement from their local automotive dealer. The truth is that buying a new car is possible without a large down payment. Actually, it is feasible without any down payment at all!

Most dealers tell people with bad credit that a down payment is required just because of poor credit history. While this may be true for some lenders, the major reason for such requirement is that dealers want to make more money off you. They typically receive contracts and incentives from financing companies that work with and always want you to get funded through those. They want you to come up with a good chunk of money for down payment so that you may get approved by a lender of their choice.

What Dealers Do Not Want You To Know About Their Financing

Dealerships always try to make as much money as possible. While they are not to be blamed for it, since they are in business of making a profit, their money-making schemes do not always play to your advantage. Beside marking up the price of the vehicles they sell, they also mark up charges on auto loans. That is exactly why they want you to get financed through their preferred lender only.


Once they will find out (and they will) that you have bad credit they would try to get you approved by one of their preferred lenders. After they get a lender interest rate quote, they would mark it up by a couple percentage points, and sometimes more. Such mark-ups usually work well, since most people are happy enough to get approved and do not care too much about the interest rate on their loan. However, even such a small difference in interest could cost you extra thousands of hard-earned dollars over the life of a loan – that is how much money dealers pocket on bad credit loans.

What Dealers Do Not Want You to Know About Auto Financing In General

Have you ever wondered why auto dealers try to show fabulous effort of getting you approved? Do you know the exact reason why they tell you that they work with almost all financing companies? Well, the answer is simple: they do not want you to discover that you may be able to secure auto financing on your own with better terms and let those extra profits miss their pockets. In fact, everyone with bad credit is able to do the same lender research as the guy at financing department at a dealer would. Most lenders you may find offer quick turnaround times on your loan processing.

Also, there is an increasing number of specialized websites that allow you to get multiple offers on your car financing as fast as 60 seconds. Surprisingly enough, a lot of those are far better than a dealer may offer. Getting your car financed online may save you a lot of hassle at a dealership, as well as thousands of dollars in interest.


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