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The Ins and Outs of the Used Car Rule

Buying a car requires money and good credit. You might think if you don’t have either than getting a loan is difficult, but there are dealerships that help customers who need to build credit, and they are willing to do it with little to no down payment required. The goal is to build a customer’s credit reputation while acquiring reliable transportation. Combining awareness with some research leads car buyers to the $500 down car lots that provide solutions.

What To Research

Search for dealers who offer in-house financing. Advertisements usually read, “Buy here, pay here.”
Finding the auto dealers that do business this way is only half the battle. You also need to know what terms they offer. You can read reviews, but beyond that, it is necessary to communicate with the dealership. There are some good questions to ask:
  • What is the interest rate?
  • Do they sell the loan?
  • Do they report to the Credit Bureau?
Rates vary from dealer to dealer. Some base interest charges on the buyer’s credit worthiness. In this case, the representative may not be able to give you concrete information until you choose a vehicle.
Some dealers have an arrangement with another institution that buys their loans. The business selling the loan verifies the required criteria before making the deal. This ensures the loan will sell. It helps your credit if the buying institution reports.
Some dealerships report the good credit you establish. This is an advantage. The next time you need a car you will have more options.

How It Works

Dealers that offer in-house financing are taking advantage of a niche market. Approval is easier than it is at a traditional bank or finance company. Safe investments pay low interest rates. For lenders, customers represent an investment. Technically, the institution that makes this loan assumes a risk; the payoff is charging a slightly higher rate.

The Mindset

Buying a car is a major purchase; however, you and your car will not be together forever. A healthy mindset is one that accepts paying a slightly higher rate this time. You may also drive away in a car that falls short of your dream machine. Use this transaction to build your credit. In a year or two, you can go find the car you visualize.
You are closer to firing your taxi service than you realize. Save up $500 and do a little research. Knowing what to expect puts you at an advantage when shopping at $500 down car lots.