Bad credit auto financing with no money down can be tricky. Dealer after dealer wants money down. Buying a car with little credit and no money down, you must know some things.
First, there are only two reasons why a salesperson wants a down payment
The most common reason is because it adds profits to sales. The other less common reason is because it is justified to bring down the entire sum financed for approval by the lender. Trying to figure out what the real drive to push for cash is a little difficult, as you’re depending on the dealer to get you approved.
Most people believe that if they have poor credit, they have to use the bad credit auto financing offered by car dealers. After all, your community bank does not want to give you a loan right? This is a popular mistake that could cost you big money in ridiculous finance charges.
Allow me fill you in on a little mystery
Auto dealers mark up the value of the vehicle. Everybody knows that. I bet you didn’t know that they also mark up the interest rates? That’s right. They submit your bad credit auto financing application to lenders. The lender will respond with a quote. Let’s just say they approved you for a rate of 11%. Well guess what? The salesperson, knowing you have poor credit will tell you that you are approved at 15%. That 4% Difference is nothing more than profit for the dealership. Guess who ends up paying for it, you guessed it, you do. The payments can go up $25, $30, $45, $50, or even as high as $ 100.00 a month just because the dealer increased the interest rate.
Truth be told. You can buy a car with bad credit auto financing without a down payment and also with lower interest rates by avoiding dealer finance department altogether. If you know where to look and prearrange your financing ( it gets done every day), then you will have confidence to go into a dealership, pick out the vehicle you want based on how much the financial institution reapproves you for. This puts the power to negotiate price back to your advantage.
Original Article: http://ezinearticles.com/?Buy-a-Car-With-Bad-Credit-With-No-Money-Down&id=2515580