Car Loan Bad Credit History - Will Bad Credit Or Bankruptcy Affect Approval?
If using a bank or credit union, financing a new or used vehicle may pose a problem. Although you can obtain a car loan with a bad credit history, your choice of lenders is limited. For the most part, traditional auto lenders prefer applicants with a good credit rating. If your credit is good, you will qualify for a low rate. On the other hand, if your credit rating is low, these lenders may charge excessive fees, which will increase monthly payments.

Pitfall to Financing a Vehicle with Poor Credit

Bad credit will not prevent you from getting a car loan. Nonetheless, you must apply for a loan with the right lenders. If buying a car from a dealership, try and secure your own financing. The dealership is taking a risk when approving a bad credit application. Hence, they will charge more fees.

Similarly, if you have a recent bankruptcy, you should anticipate outrageously high finance fees. There are tips for getting an acceptable car loan with a bad credit history. To avoid getting trapped in a bad car loan, do not rush the car buying process.

Tactics for Getting a Car Loan with Bad Credit

If you must finance a vehicle with poor credit, pick an inexpensive vehicle. This way, the total financed is less. Moreover, it may help to apply for a car loan with a down payment. In some instances, lenders will offer a lower rate if you put money down on a vehicle. Using a co-signer who has good credit may also increase your chances of getting an acceptable car loan.

Of course, improving your credit rating will greatly improve your odds of snagging a decent car loan with poor credit. If your credit score is below 600, you may receive an interest rate up to 18%. However, higher scores receive better interest rates. Thus, attempt to increase your score by forty or fifty points before applying for a car loan.

Take Advantage of High Risk Lenders

High risk or sub prime lenders approve car loans for people with bad credit. To find a reputable lender, contact a local auto lender and inquire about sub prime loans. Some traditional lenders do offer these types of loans. Furthermore, dealerships may work with sub prime lenders. If you are hoping to compare various offers before choosing a lender, work with an online auto loan broker.

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What Exactly Is Dealer Invoice?
My first answer to that would be who really knows? It s a very elusive term thrown around by about all the car manufacturers and car dealer s marketing departments. You know after many years in the business, I m not sure I could tell you precisely what true dealer invoice or what is termed dead cost is on any particular vehicle. I m sure the owner or the ownership group could somehow calculate this elusive dollar figure but most of us humans will continue to search for the ever elusive animal we refer to as dealer invoice. To say this term is a bit misunderstood is a rather large understatement. Maybe that s why it works so good for the folks in the marketing department. Many potential car buyers assume that what they uncover on the internet is the car dealer s invoice price. Well, not really. It s certainly one heck of a lot closer than checking the MSRP of a give vehicle, but it probably isn t going to be dead cost . You hear it all the time. In fact right here where I m at there is a local dealer that says all you ll ever pay is $50 over factory dealer cost; and they have been selling cars this way since day one oh so many years ago. I guess it shouldn t, but it really baffles me how this works on the consumer. Just do the simple math; if this dealer sold 300 cars a month (about 10 cars a day!) times $50 over factory cost (the inference here is that you are paying $50 over what the dealer gets the car for) this dealer would be grossing $15,000 per month on new car sales. I can unequivocally tell you that this would never cut the mustard! Think about it $15,000 a month and this dealer hasn t even paid rent, utilities, insurance, salaries, benefits, and on and on. So, $50 over factory invoice not hardly. So what is it then this thing car dealers call cost or invoice? Well, it s a bunch of numbers being added ” subtracted ” multiplied ” and divided before anyone knows the dead cost of the car for the dealer. What s a consumer to do? Getting out on the internet and doing your homework is a very good start. The exercise of comparing the information you gather is a good one and is to your advantage if you want to start your negotiations at invoice price. Which, by the way, you NEVER negotiate from the sticker price down. While doing your research on dealer invoice prices it s important to make certain you are comparing exact features and option packages to one another. This will at least give you baseline comparisons with which to work. All car dealers receive different incentives from the manufacturer; factory to dealer ” marketing incentives ” dealer holdback, and on and on. The fact that much of this is not disclosed is why it is very difficult to come up with dead cost for the car dealer. For instance, in the case of dealer hold back; the dealer doesn t even get this money until after the car is actually sold. There are other expenses that the dealer has that are applied to the overall cost of a particular car, including how long a particular car has been sitting on the lot. You see the dealership finances their inventory and as such pays interest on this financing so a car that has been sitting on the lot for some time has cost the dealer more than the ones that they are just unloading from the truck. As you can see, there are too many variables to any particular car at any particular dealership to know exactly what the dealer has put into a car in terms of cost. However, as we talked earlier, doing your research on the invoice price is a good place to start. Just don t stop there thinking you have all you need and don t need to do any further negotiating on the selling price. Purchasing cars and negotiating is almost synonymous. Getting a good feel for the invoice price is just a starting point. Now it s time to roll up your sleeves and work on getting the best possible price you can.

Jeff Neilan worked for many years in the automotive industry as a salesman, finance manager, new and used car manager, and general sales manager. With Jeff's working knowledge of car dealerships, car sales, and financing you'll find his articles on getting your best car deal insightful and rewarding when purchasing your next car. Please visit http://www.acarbuyersguide.com for more of Jeff's articles.

"As Is" Rarely a Good Sign When Purchasing an Automobile
As a car dealer that specializes in luxury late model imports, I never deal with cars that don’t have a balance of factory warranty. Still, I know a number of people out there simply can’t afford to spend a lot on transportation. I’ve been there, and I know how it feels to be on a budget when needing a reliable vehicle you can depend on to get you to and from work. The solution for many is to purchase older model used cars with high mileage. In my opinion, this can be an excellent temporary (or permanent) solution to your transportation needs. Properly taken care of, a vehicle can last for several years beyond what many would call its “shelf life”. The trick, of course, is knowing which automobiles have been well maintained. As with people, the phrase “you can’t judge a book by its cover” often applies. A rusty exterior, while not esthetically pleasing, may be the outer shell to a well oiled machine (pun intended). As I mentioned in another article, having your mechanic check out any vehicle you are considering isn’t a bad idea at all. It may cost you forty or fifty dollars, but the amount it could save you in the short term is well worth it.
There is one type of car, however, that I can wholeheartedly recommend against, and that is a vehicle sold “as is”. “As is” vehicles have no warranty whatsoever. The buyer assumes all responsibility for the auto in the condition its in when sold. Let me make it clear for you…if a vehicle is sold “as is”, there’s always a reason why. A reputable dealer will be up front with you about problems with an “as is” vehicle. You may be wondering why any reputable dealer would be selling a car “as is”. The answer is that dealers often receive cars on trade that have one or a multitude of mechanical problems which are not worth the trouble (i.e. expense) of fixing. Still, these cars can serve some purpose. They can be used for parts or, in the right hands, repaired and driven as reliable transportation. Consumers looking for a car they can simply drive right off the lot, however, would be doing themselves a favor by staying away from any auto that doesn’t have at least a thirty day warranty. If something is seriously wrong with the vehicle, there’s a great chance it will show itself within that time frame.

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Car Dealerships: The Last to Try eCommerce
In my years when I worked the sales departments at various car dealerships, one word always crept into conversations between sales managers and salespeople. Control. Control your customers. Control the car deal. Control the situation. Control everything.

In the automotive industry s glory days of 1975-1997 (before the internet came and ruined everything for them), two major things were developed and maintained.

1) Customers were kept one or two steps behind, and

2) Dealerships made lots of money.

These two developments were aided mostly by the salesperson and their managers abilities to control their customers.

This, more than anything else, is why the automotive industry is the last to jump on the Buy it Online bandwagon. From your home or office, the dealership has no control over you. For this reason, 99% of new and used car dealers with websites use their web presence for one reason: to get you to their lot.

The few who do offer ways to buy a car completely over the internet and via telephone are the ones who will eventually pave the way. The quality of cars, the length of warranties, and the information available to consumers are all increasing. With a bit of research, people are able to decide which vehicle fits them best without going from dealership to dealership test driving cars and collecting brochures.

A Bit of Research

New cars are simple to research. Sites like Kelley Blue Book offer a smorgasbord of reviews, photos, and pricing information. Search Google for the vehicle you are considering and literally millions of results beg to be clicked and read.

Used vehicles are a bit trickier, but it is still possible to get almost all of the information needed to make a decision. Classified automotive search sites like Cleveland Used Cars offer a diligent consumer a place they can find their perfect vehicle.

The roadblock occurs at the intersection between the consumer and the dealer. They both lie to each other. Not all of them, of course, but enough to where the trust level between the two is just below Hillary and George W. and just above Syria and Israel. The dealerships started it with shady tactics and the consumers are fighting back with techniques taught by, yes, a barrage of websites dedicated to cutting the dealers bottom lines.

Some dealer websites are able to give just about every bit of information about a vehicle that is available before the customer drives out. Still, even technically advances dealers like Bristol Honda Dealers and Los Angeles Kia Dealers are finding roadblocks in implementing a completely online transaction process.

Breaking through Roadblocks

Nick Umbs, Internet Manager at Ted Britt Ford in Virginia, has tried to bridge these gaps through eBay and other methods.

We start out by posting 35-50 detailed photos along with a highly detailed description of the vehicle, said Umbs. We want the customer to feel like they are actually at the dealership with the vehicle. We don t want them to have any unexpected surprises upon delivery.

The whole process is very painless with great results.

Using their prowess with eBay and an eAutoDrop option for consumers, they have been able to sell and ship vehicles around the country and across the world.

Another problem is with the trade-ins. While most dealer websites offer photos, a complete list of options, an available vehicle history report, and a promise that their used cars have been inspected and reconditioned by their service department, most consumers want to know their trade-in value based upon make, model, and miles.

Diffee Ford Lincoln Mercury in El Reno, OK, handles distant trade-ins as part of their Buy a Car Online process. Step 2 of their process has a page where the consumer can answer several questions regarding their vehicle and its condition. They are asked to send photos of their trade-in so that an accurate value can be placed on it.

We have been able to sell dozens of vehicles to out-of-state customers because of 100% disclosure on both ends, said Dandy O Connor, Customer Resource Manager. We don t expect them to buy ours if it isn t what we described, just as we wouldn t take theirs if we were misled. Since we started the program, we haven t had any of these deals go south.

Their list of customers last month includes buyers from New York, Arizona, New Mexico, Texas, Kansas, Nebraska, Illinois, Arkansas and Florida.

Buying Online in Today s Marketplace

The industry is reluctantly heading towards less face-to-face contact. Until it fully gets there, consumers can still buy their cars online ” it just takes a lot more work.

First, they must find a dealership willing to deal with them in this manner. They may have to send inquiries to dozens of dealerships before they find one that doesn t ask When can you come in? during every email and phone conversation.

Once an e-friendly dealership is identified, it is best to cut to the chase. Find the vehicle you want and make an offer. If there is a trade-in, your offer should include how much you want for it. Many websites advise people to hide their trade until they have worked out a price for the one they are buying. This is absolutely pointless and incredibly annoying to the dealership (so much so that it can actually hurt the final negotiated trade difference ” this is explained below).

Online negotiations can be tedious. Emails can take time to be answered. In the meantime, the vehicle in question could sell. If possible, a consumer should initiate a phone conversation to discuss the money. The consumer should be prepared with information on both vehicles, including payoff on their trade-in.

While Edmunds and Kelley Blue Book are excellent for finding information about vehicles, their trade evaluators are usually inaccurate. Black Book is used by dealerships and offers realistic trade values.

Once both parties agree on a price or trade difference, payment can be arranged. Whether through online credit applications or simply having the dealership fax a buyer s order to the consumer s bank or credit union, it is not difficult to pay for a vehicle via internet, telephone, or mail.

Finally, arrange to have the vehicles and paperwork transported or set an appointment to finalize the deal at the dealership. If the paperwork is to be transported, the consumer will want to talk to the finance manager to discuss any warranties, fees, and insurance considerations before the paperwork is drawn up.

If the deal is to be consummated at the dealership, the consumer should still talk to the finance manager. They will want to talk face-to-face about other products. Let them talk to you about everything over the phone and ask them to have the paperwork drawn up before you get there. Finance is the last, best place for the dealership to make some money, so they will not do the paperwork ahead of time unless you ask.

The Truth About Trade-Ins

If a dealership whittles their price down, then learns of the trade, they will simply offer less for the trade than they would have prior to negotiations. Here is a realistic example:

If their car is listed at $20,000 and the trade-in s actual cash value (ACV) is $5,000, the dealership might make an initial offer of $20,000 for theirs and $6,000 for the trade.

This is a necessary dealer trick because the vast majority of customers believe their trade is worth more than it really is. Dealerships can show more in the trade by decreasing their profit and run less of a risk of insulting their customer. After all is said and done, they are still counting the trade in as a $5,000 car.

Now, after some more negotiating, both parties might agree at $19,000 purchase price and $6,500 for the trade-in, yielding a trade difference of $12,500. In this case, the dealership most likely raised their ACV of the trade-in to $5,500 because they wanted to make the deal work and it was negotiated in good faith.

Given the same situation but where the consumer doesn t mention the trade, the dealership might offer an initial $500 discount from the $20,000. Back-and-forth they negotiate and agree on an $18,000 selling price. Then the trade is brought in.

The dealership will still think the vehicle is worth $5,000 and will probably offer that much since they have no room show more money in the trade. Many dealerships might even offer a little less out of annoyance. Chances are very high that they will not budge from the $5,000 ACV, so negotiations end. The consumer can either take the $13,000 trade difference or not.

The Future

The ability to complete a vehicle transaction over the internet and telephone is slowly working its way towards fruition. The advantages are aplenty for both consumers and dealerships. It would broaden the options of consumers, decreasing the need to settle for a vehicle that isn t exactly what they want. It would expand the potential customer base of dealerships by making distant buyers more accessible.

As of now, the consumers want it, but the dealerships are hesitant. They will all eventually break under the weight of necessity as more dealerships learn the lesson that sometimes, it s okay to lose control.

J.D. is a marketing specialist for TK Carsites, an automotive web design firm in Orange, CA. His clients include <a href="http://www.tkcarsites.com">Dealer Websites</a> | <a href="http://www.pbhonda.com">Bristol Honda Dealers</a> and <a href="http://www.1stautogroup.com">Los Angeles Kia Dealers</a>.

Bad Credit Auto Loan Refinance - Should You Refinance With Bad Credit?
Should you refinance with bad credit? Yes, but only if you can get a savings with a lower rate or need a more manageable monthly payment. Luckily, with so many lenders competing for your business, you can often find good rates and terms for bad credit auto refinance loans.

Has Your Credit Score Improved?

If your credit score has improved since you originally financed your auto loan, then you probably qualify for better rates. Fortunately, time is your chief ally when it comes to seeing your credit score improve. Two years after a negative event, like a bankruptcy or foreclosure, and it ceases to have a significant impact on your score.

Improvements in your income, investments, and cash reserves can also increase your score. Reductions in your overall debt levels will also boost your score.

Have You Compared Auto Loan Rates Recently?

The only way to see if you can get a better deal on your auto loan is to compare loan quotes. In a few minutes you can have multiple offers from broker sites. You can also research rates lender by lender.

Regardless of which strategy you choose, request quotes without giving access to your credit report. Otherwise, you will see a dip in your score due to multiple credit inquires. When requesting loan estimates, makes sure you specify that you want a refi loan.

Will You See A Savings Or Benefit?

Even with a really good loan offer, you need to make sure you will see a savings from refinancing. Take your best loan offer and calculate the cost of both interest and fees. Compare that to the remaining interest due on your auto loan.

If you have a short amount of time left, you may find that even with lower rates, you won?t see a savings. However, there are times when you may still choose to refinance. For instance, you can lower your monthly payment by extending your loan term. You may also choose to refinance after a divorce in order to keep the car in your name.

Refinancing a car loan is a decision that should be based on good information. Check loan offers and compare it to your current loan. Then you can decide what is your best option.

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Tips On Dealing With Auto Fraud
The auto industry and their dealers are rife with scams and fraud and the potential buyer needs to be armed with the knowledge of how these scams work and how to avoid them. There are many dealers that run reputable businesses and can get buyers into a vehicle without using fraudulent means, but there are always those individuals or companies that are looking for ways to take consumers for a ride. The state of California, San Diego and Los Angeles in southern California in particular, is home to many of these scam artists. Even smaller states like Oklahoma have their share of fraud cases and attorneys there are as busy as lawyers in the larger California market. If you are fortunate, you won’t be a victim of one of these disreputable dealers, but it is wise to be aware of potential scams before you head to the dealer. Here are some tips on dealing with auto fraud.

People with bad credit are often the victim of fraud at dealerships. They are easy prey, often due to the fact that they believe they cannot get financing. The worst offenses usually occur in the finance office, where the potential buyer often lets their guard down. One way to lessen the chance of being scammed is to show up with no trade and to have your financing done through your bank, with a bank draft in hand.

One of the most common frauds committed by car dealers and one that attorneys see frequently brought to them is the advertising fee scam. Dealers slip into the contract an advertising fee. Often times the advertising fee is on the factory invoice. Dealers add in a second advertising “fee” which becomes pure profit for them. The way to avoid it is to simply ask that it be taken off the contract. If the dealer tells you that the factory doesn’t charge them an advertising fee, have them show you the invoice. If there is no fee on the invoice, which is unlikely, it is okay for the dealer to charge between 1% and 3% of the Manufacturers Suggested Retail Price or MSRP for an advertising fee. If it does not appear on the invoice, then the fee is completely negotiable. If it does appear on the invoice, then that is a case of dealer cost and is not negotiable.

If you feel you are the victim of auto fraud, the best way of dealing with it is to contact a lawyer and learn what your options and rights are. If you have a good case, a lawyer will have no problem presenting your grievance to the court.

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First Time buyers, bad credit auto loans, bad credit car loans,no credit car laons
How to get approved when you have no credit.

They teach a lot of things in schools but one thing they don t teach is how to get a loan when you don t have any credit. So picture this you 18 years old you just graduated from high school and you need to get a car so you get to collage and your job what do you do. Well you might think do I get a cosigner? Do I buy car cash? Do I go to every dealer in town to try to get a car loan?
Well you if you have a cosigner then go ahead and use them, but if you don t what do you do? You need to go and pay cash or hope you don t get declined by every car dealer in town. You can do this be smart about starting you credit and make a plan before you run out their and make a mistake and get a car you can t afford on a interest rate that is to high and end up not be able to pay for it.
If you want the best chance of getting approved you what to make sure you have got a job and have been on that job for at least 1 year. If you have been on your job for less than 1 year you are going to need a previous form of employment and preferable in the same field.
Once you have figured out that a job is important to getting loans prepare yourself to prove your income. We you get ready to prove your income you need to have a computerized pay stub and maybe even a W-2 form from your previous one to two years income if you have been on your job that long. If you don t have a computerized pay stub then you need to get copies of you cancelled checks from payroll and or letter from your employer stating your start date on your job, position, and pay rate.
Once you got the proof of income taken care of you need to make sure you have some money down. The more money that you have down the better chance you have of getting approved for a loan and also the lower payment you will have. When a bank lends to a first time buyer or a consumer with no credit they like to see some sort of investment on the consumer behalf. The banks feel that if a consumer is buying the car with no credit is willing to invest some of their hard earned money in the car that they apply for a loan for then they will be more like to pay for that car.
Once you have got the down payment taken care of then you need to be reasonable about what type of car you are going to buy. This means a car around ten thousand dollars. Make sure the payment is around 15% percent of you gross monthly income. You may be able to get a little bit more expensive new vehicle through a first time buyer program with manufacture. One manufacturer that has a first time buyer program is Ford. If you need a reputable company to put you in touch with a dealer that can get you approved on a first time buyer program check out http://www.shotcredit.com.
Best of luck getting your new or used vehicle hopefully you take you no credit to good credit instead of bad credit.

Paul Armstrong is finance professional with 10 plus years of experience in auto industry. During his time in the auto industry Paul has focused on helping customers with bad credit obtain auto loans when no one else was able to. Focusing on the sub prime auto market has been a 10 year pursuit to educate himself in the intricacies of how to get customers approved with recent bankruptcies, prior auto repossessions and overall horrible credit.

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