Second Chance Auto Finance – Should You Use a Buy Here Pay Here Car Lot If You Have Bad Credit?
If you are in the market for second chance auto financing, you probably have been tempted by the notion of using a buy here pay here car dealership to obtain a car loan. You should seriously think again because in the world of secondary auto finance, there is simply nothing worse than using a dealership that finances their own vehicles.
The amount of money that you are charged for the vehicle is generally much more than it is actually worth at retail. It is common for vehicles at buy here pay here car lots, to be priced at amounts that are up to 200% more than they are worth at retail book value. The reason that these types of establishments can get away with this is because the people that generally patronize their dealership, are at a loss for options. Or, so they think. There are alternatives to this type of financing that can be taken advantage of.
The interest rates that are charged on vehicles financed through these types of establishments are astronomical. It is common that you can expect to pay upwards of 20% to 30% on the amount financed. This equates to 50% of your monthly payment going towards interest charges. Using other alternatives, you do not have to pay these incredibly high percentages. There are much better options available online.
Online auto financing offers you the opportunity to be paired with a lender based upon your past credit history. Rather than seeing if you’re able to get approved or not, it is a simple matter of being matched with a lender that will approve you.