When you are looking to buy a car with bad or poor credit it doesn't leave buyers with lots of options. Occasionally their only choice for finding a lender for their new car purchase is through a car dealer loan.
Car dealership loan deals are not as bad as a lot of people may think. However, it is certainly true that they may hide a lot of surprises so if you are in fact planning to use a Car Credit Loan you should be extra vigilant.
The first thing that you need to watch out for is if the interest rate happens to be fixed. By fixed I mean that it's clearly stated in your contract and that all of it is written in a way that it wouldn't allow the car dealership to change it at a later date. What lots of car dealerships tend to do is approve your car loan application, have you sign the documents, and hand you over the car. After that later on they just give you a phone call and state that in fact you do not qualify for the loan because you have poor credit (which is something you already knew to begin with) and that you must pay higher interest rates in order to keep the car. If you fall into this situation you should try to either find a loan from another lender or report the scam and fight back.
Another extremely popular scam done by car dealers is to make you look for a cosigner for your loan convincing you that this is the absolutely only way that you can get financing since you have a terrible credit history. It won't be difficult to convince you at all. First of all it sounds pretty reasonable and second of all the car dealer will cause you to believe that this will in fact repair your poor credit profile. Later on you will discover that your name isn't including in the loan documents and that the loan is in the name of the cosigner only even though you are paying it . Not only is this illegal but it also may lead to serious penalties but it's not helping your poor credit at all. If a dealerhship offers such a thing you absolutely must refuse.
If you're a poor credit consumer and have difficulties in finding a good loan, it's pretty obvious that you shouldn't overstretch yourself. What this mean is to buy a reasonably priced vehicle and not to buy into all of the extras like the extended warranties for example. However, many different Bad Credit Auto Loan will end up trying to trick you by making you believe that you must buy a warranty that will increase your loan just to qualify. Since you are in a desperate situation you would end up saying Ok. However, if you for one second think about it, you can plain as day see this is simply a trick to increase your loan costs.
