There are many Car Dealers who offer clients the option for in-house financing to help even individuals with bad credit be able to drive home in a new car. In-house financing is when the dealership itself finances the car for you and you in turn pay them back for the money that has been lent. Someone with poor credit, who cannot get a traditional car loan from a bank, may think that the in-house financing option is a good choice for him or her. They may think that the Car Dealers are really trying to help them out and that they are getting a great deal. Before you agree to in-house financing, there are a few things that you need to know.
Car Dealers are in the business of making money, not giving it away. They want you to finance the car with in-house financing so that they can get the interest payments from you. Most of the time, in-house financing has very high interest rates attached to it. There are times with interest rates attached to car loans given by Motorparks Car Dealers are as high as 19%. It is important to read and understand what your interest charges will be if you choose to by a car through in-house financing.
Many of the loans that are given in-house require you to agree to a certain maintenance package. That could mean that you are required to get the car serviced on a strict schedule, as the dealership. This can be a very expensive option because dealerships often charge over $100 for a simple oil change.
If you really need or want a car, but simply cannot get a loan from a bank, you may want to consider buying a car from a private seller or putting down a large down payment on the car. The lower the loan amount for your car loan, the less interest you will have to pay overall. This will also show loan officials that you are serious about your car purchase and that you are going to be able to afford the payments. It is important to considering all of your financing options before buying a car.
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