Bad credit auto dealers are great when needing a new car, presumably used, but don’t have the credit to pay for it. If you find yourself in a similar situation, fear not as there are millions of Americans with bad credit buying cars.
The only way they can do it is by using the services of bad credit auto dealers. While we won’t get into why people have bad trust, we will discuss the pros and cons of these services.
So, without further ado, here is the complete 2020 guide on the pros and cons of these auto dealers.
1. Con – Some May Try to Scam You
This isn’t really what it sounds but there are plenty of auto dealers that will offer you a vehicle with your being in a terrible financial state. Sure, these services are meant to help you with bad trust, but some will sell a car to a 14-year old if they can.
If a particular dealership is prepared to do business with you despite you having no income or no one co-signing the deal, then that’s an instant red flag to avoid.
Some are so shady that they won’t even ask for any proof of income. If you happened to walk into a dealership and be offered a vehicle without any proof of income, then you need to leave immediately as these aren’t the professionals you’re looking to do business with.
2. Pro – They Are Meant to Help You
The fact that your bad credit score doesn’t play a role with these dealerships is a testament to how much they try to help you buy a vehicle.
The people that do use these services are usually desperately looking for some form of transpiration to get them from point A to point B. Since a bank won’t approve your credit due to its poor state, you can enter one such dealership and talk things out with the owner.
These services are very different from car dealerships as they’re very easy to secure. You will need to show proof of income and your bad credit gets overlooked.
However, you will have to pay higher interest rates. But you have to decide on whether you need a vehicle and will pay slightly more despite having bad credit, or won’t buy a vehicle at all.
In most cases, bad credit auto dealerships will work with you on finding middle ground and set you up with a vehicle.
3. Con – Higher Interest Rates
We touched a bit on this subject and it’s fair we explain it a bit further.
Since you have bad credit, it means that you’ve got a lot of “red flags” in your repaying abilities. You get a poor score by failing to pay your monthly bills.
This makes it harder for you to get loans from the bank to pay for certain things.
And with all that said, bad credit auto dealers go off their way to give you the chance to buy a vehicle. So, that means they’re taking a huge risk by offering you the chance to do business.
Fortunately for them, their way of security comes in the form of higher interest rates. This is something you should particularly pay attention to, as some services are highly unprofessional and bottom-line extortionists.
Some are better than others, such as franksautocredit.net, and offer you better terms. So, even though this is considered a con, you need to do your research and turn it into a pro.
4. Pro – High Selection
If you thought that you’d enter a bad credit auto dealership and only see a couple of vehicles on display, then you’re greatly mistaken. These services have hundreds of cars for you to choose from.
Their auto-selection is pretty impressive, even if we compare them to high-end dealerships. While newer and less successful ones are fairly limited in numbers, most run a pretty tight ship and have hundreds of vehicles for you to choose from.
5. Con – No Extended Vehicle Warranties
You might ask yourself how it is possible to buy such a good-looking car for so little cash. Well, maybe the answer is that most of these dealerships don’t offer an extended vehicle warranty or any type of warranty at all.
What you can do to cover for this is get your warranty and later expand it into insurance. Most insurance companies will ask for a vehicle warranty, so your best bet would be to obtain one.
With all that said, that will cost you most but is not included in the price for the vehicle you’ll be getting from a bad credit auto dealership.
6. Pro – Less Paperwork
We slightly touched on this one in a previous point, but it’s safe to say that no one wants to fill out paperwork. Well, if you’re a type of person that sympathizes with this, a bad credit auto dealership is probably the best place to buy a car from.
When discussing terms with these services, there is generally a lot less paperwork involved. While the case is different for each service provider, the consensus remains the same.
Since you won’t be approved for a loan anyway, due to your bad credit, you can choose to do business with a service that asks a lot less paperwork and a lot fewer clearances.
7. Pro – It’s Not A Bad Way to Finance A Vehicle
And the last tip of this guide is a final pro that sums up the safety concerns people have with bad credit auto dealerships.
Even if you have a perfect credit score, you can choose to do businesses with these services so the transaction doesn’t reflect on your credit score.
This is particularly useful when needing to preserve your credit score for other, more important transactions such as buying a house.
Since these services have an excellent arsenal and don’t check on your credit score, it might work in your favor to do business with them.