Bad credit auto financing

A financial concept created to increase the number of automobile loans that are approved for good people with bad credit car finance.

Now that you understand a type of financing, it might be bad credit car finance, you might wonder what actually transpires in the finance office. The first item on the agenda is to confirm that the finance person acknowledges with the prices you and the salesperson agreed on earlier. This must be done before you begin discussing the details such as length of financing, interest rate, lease versus buy, etc. Below is a list of items you should discuss with the finance person:

• Reaffirm the cost of the new car. Verify that you both agree on the items that will be included with the vehicle. Do not negotiate. If he balks at the price, show him the figures you have written down, and call in the sales manager if necessary. There should be no surprises at that this stage.
• Reaffirm the price given you on your trade in. Go back to your notes, and have the financing associate confirm that this price is fixed, and that there will not be a sudden change in pricing.
• Reaffirm the amount of down payment required. Dealers love cash. Make sure the amount of down payment doesn’t suddenly rise.



• Verify the amount of rebates, such as first-time buyer discounts. This is all "free" cash, as far as the dealer is concerned, but it should go directly to the customer. If there is a factory-to-consumer cash rebate, it will be presented here. Make sure the price for the new car reflects this discount. It is important to clarify that your rebates were not negotiated into the low price you received for the new car. Factory-to-dealer cash discounts, on the other hand, are discussed in the sales room when determining the pricing for your new vehicle. American car manufacturers typically give factory-to-consumer cash rebates, and Japanese car companies give more factory–to-dealer incentives.



• Reaffirm the amount of package discounts. Check for mistakes in this figure. If the dealer promised you power steering at no extra charge because you bought the air-conditioning system, make sure the finance associate honors that commitment.



• Ask about extra options, such as an alarm system, an extra pinstripe, an extended warranty. Make a firm decision on each one, then negotiate the price. Remember the high markup, and try to cut the cost by at least half . If you can't do that, most options are not worth considering.
• Ask how much time you have before your option to buy an extended warranty expires. Also ask if there is any other organization that will offer you an extended warranty on the car at a later date.



• Ask about the dealer’s best financing package before you reveal that you already have financing from an outside source. Once you have the information, compare it to the financing you have. Check for the Rule of 78 financing. When you mention your outside financing, ask the dealer to beat your package. Tell him you would rather the finance money go to the dealership than to the bank. Make sure these figures make sense and are correct for the loan amount you are borrowing.

The dealer may offer you financing, but some of the terms of this financing will differ from that offered by your bank or credit union. Most dealers offer interest rates that are based on the Rule of 78. Most outside lending institutions use a method with interest on the declining balance of the loan.