You have bad credit and banking after 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 that it adds gain on sale. The other less common reason is because it is necessary to reduce the total amount financed for approval by the lender. Trying to figure out what the real motivation to push for cash is a little difficult, provided that you are depending on the dealer to get authorized.
Most people think that if you have bad credit, they have to use the financing offered through the car dealership. After all, the 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 little secret …
Car dealers mark the price of the car. Everyone knows that. Did you know that also marks the interest rate? Yes, yes. You submit your credit application to the lenders. The lender responds with a bid. Let’s say you agree with a rate of 9%. You know what? The merchant, knowing that you know you have bad credit will try to convince you that you are approved at 12%. The 3% becomes nothing more than the benefit that the finance manager is paid a commission. Guess who pays … you. Your payments go up 10, 20, 30, 50 or even $ 100.00 per month, simply because the dealer checked the interest rate.
The truth is this. You can buy a car with bad credit no down payment and with lower interest rates, simply keeping the entire dealer finance department. If you know where to look and pre-arrange the 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 preapproved and had the dealer a check. This puts the power to negotiate prices on their behalf.