If you’re wondering about how to get the best deal for car sales on credit, rest assured: You’re not alone. In fact, the topic of car financing has become so popular online, that it appears as though it has become entirely impossible to find impartial advice on it.
This is all the more true as bad credit scores are ruining many drivers’ chances of finding reasonable financing options.
At Concept Car Credit, we sympathise strongly with this issue, since providing car financing to everyone, regardless of their credit score, has been an essential part of our mission right from the start. We feel it is your right to find a great car without having to resort to dubious auto sales or auto auctions. Which is why we have put together this short introduction to car sales on credit to help you take the all important first steps towards a great deal.
Car sales on credit: Nothing out of the ordinary
Let’s begin by saying, though, that car sales on credit are not the exception when it comes to car finance. Far from it, they are the typical way of paying for new vehicles. And this holds true pretty much regardless of the financial situation of the buyer.
Buying a car on credit makes even more sense today, when interest rates are on a historical low, putting the dream of driving within your reach. So you’re doing absolutely nothing out of the ordinary. You’re doing things the way they are usually done.
Car sales on credit: Bad credit doesn’t mean no credit
The old equation ‘bad credit = no credit’ no longer applies. It does still hold true that a good credit score will get you better rates and some dealers may even reject working with anyone who has experienced financial difficulty in the past. But generally, these reservations are no longer the norm.
Instead, car buying on credit is regarded as the beginning of a long term relationship, in which the financing part need not necessarily represent the main source of income. Which is good news if you’re afraid you may end up empty handed.
As we’ve explained in a detailed blog post, credit reports also tend to merely present one side of the story. They can never constitute the sole argument for granting or rejecting a car loan application.
Also, bad credit car dealerships are by no means the black sheep they once used to be. The auto financing industry has diversified – and many of the new options are just as professional (or even more so) than the traditional car loan services.
Pre-owned is best
At CCC we focus exclusively on pre-owned cars. Why is this?
Depreciation, mainly. Over the first two years, cars loose the largest part of their value. This means you can get an almost as good as new car at a heavily reduced price at around the three year mark.
Especially when you’re buying on credit, every little bit helps. Pre-owned cars simply offer the best value for money. That’s why you shouldn’t even give factory new cars a second thought.
It goes without saying that if you’re looking for car sales on credit with a less than perfect credit score, you should come as prepared as possible to avoid snap decisions.
Which means you should have all of the following points covered before setting foot in a showroom:
Car sales on credit: Be prepared
Set your budget. Generally speaking, it is essential to set a boundary for yourself based on what you can afford and how urgently you need a car. This will put some space between your emotional response to vehicles you really like and your financial possibilities.
Establish what kind of monthly payment you can afford. This naturally goes hand in hand with setting your budget, but it’s not quite the same. By changing the length of the lease, for example, you can either raise or reduce your monthly payments and thereby put cars, which might seem out of your league, at your disposal. Do be aware, however, that lower monthly payments almost always translate to higher overall rates and the best offers for car sales on credit will usually involve shorter leases.
Define what kind of car you need. Needless to say, we all have our dreams, but when it comes to everyday life, the best choice may be to ignore them. If you just need a car to take you to work, you won’t need a SUV or expensive gadgets, for example.
Conduct research on different models. The Internet has made gathering information a lot easier, so there is really no excuse for walking into a showroom without at least some basic knowledge of the models on display there. By investing a little more time, you can turn into a full-fledged expert.
Find out your credit score. Even if you’re afraid it might not look good, it’s absolutely vital that you at least know exactly where you’re at. This will also help you determine if you need to start looking for bad credit car dealerships.
Car sales on credit: Expert recommendations
Once you’re in the showroom, of course, you’re entering an entirely new phase of the buying process. It is here that many buyers feel uncertain about car sales on credit and afraid of stumbling into a bad deal.
Then again, there are quite a few things you can do to protect yourself:
Take a test drive. This should usually not be an issue and remains one of the most under-appreciated factors in car sales on credit. Even used cars will today last for many, many years, so you should at least take out a few minutes to determine if you’re happy with the feel of the vehicle.
Go local. Buying a car online or at a dealer in another city may save you a few Pounds, but it also means you won’t have a direct contact in your hometown. Whenever possible, buy your car locally and with a dealer you really trust.
Ask questions. If you’ve done your homework and researched the cars on display, you should have even more questions than before. Talk to the dealer and ask for her or his opinion to establish a rapport.
Never decide straight away. Buying on the spot is never a good idea when it comes to car sales on credit. Which is why it’s always better to clear your head. In some cases, you will have to take a decision quickly. But at least allow yourself the time to have a cup of coffee and think things through.
What about bhph dealers?
BHPH is short for buy here pay here. Unfortunately, many car dealers using this term have gathered a pretty bad reputation. As rumour has it, these dealerships target car buyers with poor credit, selling them low quality pre-owned vehicles at bad prices.
However, you may also have heard the term ‘in-house financing’, which is generally considered far more reputable. Curiously, the two are entirely interchangeable: Buy here pay here is exactly the same as in-house financing.
What bhph dealers are really offering is a one stop solution. You secure financing / payment at the same place where you buy your vehicle. You may even arrange your car trade-in while you’re at it. And there’s absolutely nothing wrong with that per se.
Now, it is true that most bhph dealers focus on poor credit car buyers. They may also be more lenient when it comes to your credit history. But that doesn’t make them problematic straight away.
Instead, get as much information on the dealer as possible. Check the fine print and the contract thoroughly. Most importantly, be weary of companies that will guarantee you a loan without checking credit reports at all.
Your car dealership is your friend
We’ve all heard the story: A car dealership is not to be trusted. But is this really true?
In reality, dealerships can be great partners. They’re knowledgeable, can get fantastic car loan deals and offer a variety of financing options. They may also be interested more in your overall credentials than purely good credit scores. It is also obviously far more convenient to perform car buying and getting an auto loan at the same place.
At Concept Car Credit, we take car sales on credit seriously. To us, that means giving you great deals and building a personal relationship. If you’re in Manchester, do drop by our showroom and find out how we can help you find both an auto loan and the car that’s right for you.
Here, you will find quality pre-owned vehicles at a more than reasonable price. And a car trade-in is by no means required.
And if you just can’t let go of your dreams, we will usually have quite a few SUVs, too.