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Are you afraid of bad credit car finance? Here’s why you don’t have to be.

Are you afraid of bad credit car finance? Here’s why you don’t have to be.

2 August 2023 Concept Car

Are you looking for a car credit but can’t find a bank that will accept you? Are you considering bad credit car finance but worried that it isn’t safe?

We know where you’re coming from. At Concept Car Credit, we meet customers everyday who swore they’d never set foot in a bad credit car finance dealership. And yet, almost every single one of them walks out the door satisfied and with a fair deal under their belt.

So how do we do it? And why is it that bad credit car finance still raises suspicions in so many potential buyers? And why do almost all experts warn you against it?

If you want to know the reasons for this seeming contradiction – read on!

Bad credit car finance does have a bad reputation.

Let’s not beat around the bush: Dealerships offering credit to those with a bad credit rating are still widely considered risky. Generally speaking, the consensus seems to be that things could go either way: Get lucky and find a great dealer or fall into the trap of a bad one and suffer the consequences.

Of course, you could argue that the car industry as a whole has a pretty bad image. From manufacturers reporting incorrect data or even outright covering up violations to dealers selling buyers unnecessary insurances and extras they neither wanted nor could afford – there are more than enough examples of malpractice.

Bad credit car finance providers, however, are a category of their own. Most consider them even more problematic than the usual dealerships.

But where does this bad reputation come from?

We think it comes from a combination of different factors:

  • First of all, a few black sheep have ruined the reputation of many perfectly professional sellers.
  • Interest rates are higher for a bad credit car loan than a usual one. Sometimes, even considerably so. Some of the most extreme cases have made it to the media, further damaging an already problematic reputation.
  • Many cars sold via these dealerships were of inferior quality. Some dealerships even went as far as selling written-off cars or vehicles with severe issues. Needless to say this did not go over well with customers who were in dire straits to begin with.
  • There was very often no meaningful after service to speak of. Meaning that if you had a problem with the car you just bought, you would often find yourself alone.

We can’t deny that these issues were very real for a long time. And, to a certain degree, they continue to plague the industry until today.

But on the other hand, a lot has changed!

A question of need: It has become hard to get a loan anywhere else.

Things really had to improve. And they have. But not in all respects. Over the past few years, the marked has changed considerably, especially with regards to credit accessibility.

Banks and credit unions, which used to have a virtual monopoly on car finance, have lost their leading position. The traditional car loan, vice versa, is no longer the dominant form of credit. Rather, PCPs have taken over – an instrument which is as convenient and smart as it is problematic and dangerous.

PCPs make new cars accessible to those with a limited budget. But they come with many caveats. And they don’t actually mean the car is yours. Rather, you can regard them as a novel form of leasing. Which need not be a bad thing, but is ultimately more expensive than buying almost every single time.

When it comes to financing a car with a bad score, bad credit car finance dealerships have thus become the most natural, obvious and ideally suited partner.

Thankfully, the car industry as a whole has worked hard on improving.

We’re not just saying this because we’re part of the car industry. There really is a serious effort by all parties involved to leave the past behind and build a better future.

The Volkswagen scandal was a hard blow to customers and manufacturers alike. It showed the lengths some companies would go to to gain an unfair advantage, hide their insufficiencies and cover up issues. Ultimately, Volkswagen got off lightly, but the industry knows very well that a second scandal like this one could turn out to be ruinous.

As a consequence, all those involved in the car trade have taken further steps to become more responsible.

Dealers, on the other hand, have long changed course.

There was a time when car dealers were about as popular as snake oil salesmen and lawyers.

Today, their image has improved considerably. You hardly ever hear or read the kind of horror stories that were fairly common only a few years ago. About how this dealership ripped someone off or another one reclaiming a car after only one or two missed payments.

Today, dealers see themselves as partners. They don’t just sell a car, they also sell their service and know-how as experts. More importantly, they have become the main providers of car finance.

And when it comes to their loan services one thing’s for sure:

Bad credit car finance is perfectly reputable.

Yes, interest rates are still pretty high. But then again, interest rates always go up as the risk of a default rises. So, in itself, this is no surprise.

The main problem with bad credit car finance is not that interest is high. It’s that the monthly rates are often not adapted to what borrowers can afford. When you’re taking out a car loan with a bad score, you know that you’ll have to pay a surcharge. There is no way around the fact that you’ll end up paying more. What you do want to avoid, however, is to have to struggle with paying your rates.

And so, dealerships today focus not so much on your rating but on how much money you will typically be able to put aside for a loan. If you can only pay back a small amount at the end of the month, then so be it. At least, both sides can trust in the fact that you won’t have to default on the loan.

It is this new strategy that has done a lot to award a much better image to car dealers.

Cars at bad credit car dealerships have become a lot better.

Sure, you’ll still find plenty of shoddy cars on the used car market. But mostly, these are sold by private sellers.

Dealerships, on the other hand, tend to focus on well maintained, reliable models which are somewhere between 3 and 7 years old. This is a great age range for buying used: They will still feel very new and look great, will not have had excessive wear and tear.

In some respects, these cars are better than their brand new counterparts. For example. any potential issues will by now have come to the light.

Yes, finding a too good to be true deal has become a bit harder. But then again, as the terminology implies, maybe that’s not a bad thing.

Consumer protection is a lot better now.

When you would buy a bad car in the 1960s, there wasn’t a lot you could do about it. In the best case scenario, the dealer would tend to your problem without charging too much. At worst, you were on your own.

Today, the government has significantly improved consumer protection – not just for new cars, but second hand ones as well. As a result, you hardly have to worry anymore about being tricked into a bad purchase.

Admittedly, you can’t just return a car you’re not happy with. But in case of a serious issue, dealers these days have to take care of it. In extreme cases, you can actually get your money back – something that was close to inconceivable back in the days.

What does the process look like at CCC?

So let’s say that we managed to convince you that bad credit car finance is trustworthy. How to proceed from there?

In a first step, you can simply spend some time browsing the expansive collection of cars in our digital showroom. Or drop by our physical Manchester showroom which offers an even wider stock.

If you are ready to talk finance, either give us a call or send us a short message using our online contact form. We’ll then talk you through all the information we need to make you a first offer.

This offer is always based to an important degree on your earnings and spendings and the amount you have at your disposal at the end of the month.

Once we’ve given you a quote, you can decide whether it is right for you or not. Either way, we always remain at your disposal!

2 August 2023 Concept Car