You have bad credit and banking after the dealer is wanting money down. To buy a car with bad credit, no down payment, you need to know some things.
First, there are only two reasons why a trader wants a down payment …
The most common reason is because it adds gain on sale. The other reason is less common because it is necessary to reduce the total amount financed for approval by the lender. Figuring out what the real motivation to push for cash is a little difficult to always depends on the dealer to get you approved.
Most people think that if you have bad credit, they have to use the financing offered through the car dealership. After all, the local bank will not give you the right loan? This is a common mistake that can cost thousands of dollars in finance charges outrageous.
Let me fill in a great little secret …
Car dealers mark the price of the car. Everyone knows that. Did you also set the interest rate? Yes, indeed. They maintain your credit application to lenders. The lender responds with a bid. Let’s say you approve a rate of 9%. You know what? The merchant, knowing that you know you have bad credit to try to convince them that they are approved at 12%. The difference of 3% becomes nothing more than the benefit that the finance manager is paid a commission by. I guess you pay for it … you. Your payments go up 10, 20, 30, 50 or even $ 100.00 per month, simply because the dealer set the interest rate.
The truth is this. You can buy a car with bad credit no down payment and lower interest rates simply by avoiding the full dealer finance department. If you know where to search and organize in advance for your financing (if done every day), then you can have the confidence to go into a dealership, choose the car of your choice on the basis of the amount the finance company that preapproved for and had the dealer a check. This puts the power to negotiate price in their favor.