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Bad Credit Auto Loans: Not so Bad After All                     What to Look For in an Auto Loan

Bad Credit Auto Loans: Not So Bad After All
By Cat Tobin

For anyone that has a low credit score, or has encountered serious credit problems in the past, a bad credit auto loan is one of the few options available. A bad credit auto loan will allow the borrower a chance to obtain a car. However, because of the high credit risk of the borrower, the loan will usually have to be repaid in a shorter time frame and at a higher interest rate than a conventional auto loan.

Bad credit auto loans typically only apply to used cars and require the loan to be repaid within 48 months. These terms make for a less risky loan for the lender. Because used cars are typically cheaper than new cars, a shorter loan term will give the borrower a better chance at fully repaying the loan, and reestablishing their credit history.

If you are thinking of applying for a bad credit auto loan, there are a few things you should take into consideration:

1. You should have an idea of what prices used cars sell for in your area, and how much you should borrow. There are some unscrupulous car dealers out there that will take advantage of car buyers financing through bad credit auto loans. They will charge unknowing consumers higher prices based on their credit situation, and corresponding lack of options.

2. You should definitely shop around for the best terms and conditions available. Not all lenders are created equal. By shopping around, you can ensure you get the best deal possible.

3. You need to know the specific requirements stipulated for the bad credit auto loan you are applying for. There are some banks and financial institutions that will only write auto loans for vehicles that are no more than 4 or 5 years old. Make sure you know all these stipulations before you go shopping.

Even though a bad credit auto loan may not be the ideal way to finance a used car, for many there are few other options. Do yourself a favor and shop around for the best deal possible. And remember that this loan may be the start to obtaining a better credit history.

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What to Look For in an Auto Loan
By Brooke Sikula

The are many things to look for in an auto loan, and many places to get such a loan. Auto loans are available from the car dealer, from finance companies, from credit unions, from banks and even from a number unconventional loan sources. The kind of auto loan for which each car buyer qualifies will be determined by a number of factors, not the least of which is the credit score of the buyer.

Those with the best credit history will of course have the best choice when it comes to auto loans, but even those with spotless credit histories will need to shop around for the best deal. It is a often a good idea to arrange financing before shopping for a new or used car.

The process of applying for a car loan in this manner is somewhat similar to the pre-approval process for a mortgage. The bnak or other lending institution will carefully review your credit history, your income and a number of other factors to determine how much you are allowed to borrow. You will in turn use that knowledge as you shop for a car. The ready avaialbilty of financing can often be a point in your favor when negotiating for a lower price on a car, and thus can save you money as well as time.

Whenever you apply for a loan, whether an auto loan or any other kind of loan, it is important to review your own credit file before the lenders get a look at it. That is because it is unfortunately all too common for credit histories to have inaccuracies, and an erroneous entry in that credit report could lead the car buyer to pay too much for the auto loan. Knowing what is in your own credit report is one of the best ways to get the best deal on the loan.

After you know that your credit report is as positive as it can be, it is time to start shopping for the loan itself. When shopping for the perfect auto loan, it is important to look beyond the monthly payment, and to calculate the true cost of the loan.

One of the most common trends in recent years has been to extend the term of car loans beyond the traditional three, four and five years. These days it is no longer unusual to see new and even used cars financed for six, seven or even eight years. While this extended loan period certainly does lower the required monthly payment, it can also greatly increase the amount paid for the car. In some cases, these extended loan periods can even leave car buyers in the uncomfortable position of owing more, often significantly more, than the car is worth. It is a good idea to look finance a car for no longer than 60 months, even if it means searching for a less expensive car.

Brooke Sikula is a freelance writer based in Ventura, CA and writes on a wide range of topics from home improvement to credit repair and everything in between. She is a regular contributor to http://www.loan-mortgage-auto.com and http://www.get-home-improvement.com For more information and advice on credit issues, check out http://www.credit-card-faq.com

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Used Car Scams to Be Aware of When Purchasing a Used Car
By Chris Contessa

Purchasing a used car is a great way to obtain an automobile without having to pay a large installment payment each month. Although one has to purchase used cars with care, a used car is useful for individuals on limited budgets or those who are looking for a car to drive around on brief occasions. When purchasing a used car, it is important for the prospective buyers to be on the lookout for a variety of used car scams that occur from time to time.

Odometer Tampering

One of the most frequently perpetrated used car scams these days is odometer tampering. There have been many instances where used car owners have rolled back the odometer readings to show a more favorable reading. This is one used car scam that individuals should be aware of when purchasing a used car. Nobody wants to buy a car they think has 50,000 miles if it really had 150,000 miles. Buying from reputable sellers will help protect you from this scam.

Salvaged Autos

Another used car scam occurs when individuals try to sell autos which are deemed by insurance companies to be total losses. Individuals will fix the car up and then sell it to an unsuspecting buyer, not letting them know that the car was actually salvaged. This is where professional inspections of a used car may come in handy prior to purchasing it.

Lemon Cars

Some used car dealers may even try to pass off a lemon car as a good used car to unsuspecting buyers. There are various laws in existence which help individuals to be free from purchasing lemon cars. However, some lemon car sales still slip through and therefore, individuals should be aware of the possibility of this occurring.

Seller Does Not Hold Title

One last used car scam which individuals should be aware of is when “used car dealers” try to sell cars that do not even belong to them. As an individual who is not the true owner of an automobile cannot pass good title on the car, it is crucial that the buyer of the used car asked to see the title for the car prior to purchasing it. By doing so, the buyer can ensure that the individual who is transferring title to the car has the right to do so.

These are some of the main used car scams that individuals should be aware of when looking for a used automobile. Simply by having this knowledge, individuals may be better prepared to go into the used car arena and find a suitable automobile now that they know what to be on the lookout for with regard to used car scams.

Chris Contessa is an automotive enthusiast that runs several automotive forums and websites. You can find Dealer reviews and ratings at his website: http://www.DealershipRatings.com

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