With so many options for bad credit vehicle financing online how do you pick the right one?
Every company advertising bad credit car loans with tell you the same thing, “Guaranteed approvals”, ”Zero Down required”, “fast pprovals”, “massive selection of vehicles”, “all credit levels approved” etc. So who do you pick? It almost feels like the best option is to just pick one and hope it works out for the best or pick all of them at least one of them will get me approved right? Wrong.
There are a few very important things to look for when considering applying for a bad credit auto loan.
1. Who are they?
There are many companies out there that advertise in Manitoba but they are actually based out of places like Toronto and Vancouver. These companies advertise in your area leading you to believe that they are the ones getting you approved and helping you select your vehicle, in actuality these companies collect your application and then sell it to dealerships so instead of becoming a customer you actually become just another “lead” to another dealership out there.
Being a lead vs. being a customer
The problem with becoming a “lead” instead of a “customer” is that when you’re a lead you’re only seen as a dollar sign, “how much money can we make off this person and then never see them again?”. Also, a lot of these lead generation companies with double and triple sell your information, what this means is that the first dealership will pull your credit information or quickly submit your application, if it gets declined they simply move on to the next one. Your information is then sold to the next dealership and they will do the same thing. This is detrimental to your credit report. The more inquires and declines you have on your file, the worse your credit rating gets.
If they DO get you approved usually the only vehicles that you “qualify” for are the ones that make the dealership the most money!
You want to become a “customer”. You want to work with a company that works exclusively with customers that have credit challenges and want to rebuild their credit the right way.
These companies have dedicated Finance Managers and dedicated non-prime lending institutions that will work with you directly and guide you through the whole process. They will get you the lowest possible rate in the best possible vehicle to make sure you are driving at an affordable payment in a loan structured in a way that makes it easy for you to rebuild your credit rating.
You’ll know when you’re working with a great company because there won’t be any pressure to “BUY RIGHT NOW!”, a great company will show you your options and allow you to make an informed decision based on your goals and makes the most sense…not the most money.
Reputable companies don’t want your business once, they want you as a customer for life.
2. Where are they located?
When you’re looking for a bad credit car financing company to work with, ideally you should try and find the best company closest to you. If you live in Thompson Manitoba it doesn’t really make sense to get your vehicle and loan through a company in Winnipeg. What happens if there’s a problem? What if your car needs servicing? Do you really want your Finance Manager/ Dealership an eight hour drive away? Probably not.
3. What banks do they work with?
In Canada there are quite a few options when it comes to banks that provide bad credit car loans, many of these banks you be familiar with. TD Bank, Scotia Bank, CIBC, RBC, BMO are a few of the majors banks but there are also a lot of smaller lenders that are not as well know to the general public.
Ideally you want to be working with a company that has access to the major banking institutions because they will usually provide the best approvals with the lowest interest rates and the most flexibility in the terms.
Also, when a company has a partnership with the major lenders, its usually a good sign that you are dealing with a reputable company.
4. Where do they get their vehicles?
You always want to make sure you are working with a company that has good quality vehicles.
Most bad credit car financing companies will either have their own inventory on their own car lot or they will partner with several dealerships and sell the dealerships new and used inventory.
Always make sure you ask to see the vehicles carproof report before agreeing to purchase. This report will show you exactly where the vehicle came from and if I has had any major accidents, recalls or repairs.
A reputable company will almost always show you the vehicle history before you even have to ask.