Things to Beware Of
with Bad Credit Car Loans
If you have credit challenges – you may be tempted by some ‘deals’ that are definitely not in your best interest.
Here are some things to watch out for:
100% Approval Guarantees
It’s a gimmick some bad credit lenders and dealers use to get you to apply or visit. It’s a meaningless promise.
- To reduce their risk, the lender or dealer will require you to make a large downpayment before taking delivery of the vehicle
- If you can’t afford the downpayment, they’ll approve you for a vehicle of less value – often with high mileage.
Car Loan Websites
There are a lot of websites for bad credit car loans. Many are what are known as ‘lead generators’ – companies that don’t offer financing or cars. Instead, they collect the personal information you enter on their online applications and sell it to new or used car dealers in your area.
- Because lead generators often have multiple websites that look different from one another, you may end up sending duplicate applications that go to the same dealers and lenders.
- That can result in your credit report being requested multiple times – which takes you to ‘Deal’ 5 to Beware Of.
High Kilometre Vehicles
Older and high kilometre vehicles are a ‘deal’ to very beware of. While they may have lower monthly payments, they almost always cost more in the long run.
- Repair and maintenance costs are much more likely, which can quickly offset “lower” payments – and throw your budget into turmoil.
- If the car dies before the term of your loan, you’ll be forced to pay for a car you can’t even drive.
A ‘deal’ to avoid at all costs is a long term car loan. To make a vehicle “fit your budget”, a dealer may spread the cost out over a longer period of time so your montlhy payments are lower. What they’re really doing is locking you in to a long-term loan – often at a high interest rate. That’s the last thing you want to do.
- It’s a financial obligation with no escape – and much of what you’re paying is interest.
- The car could die or reach the point where it’s not worth repairing before you’ve paid off the loan. But you’re still on the hook for payments.
- When your credit situation makes higher interest rates unavoidable – your goal should be to pay those rates for as short a time as possible.
- A shorter loan or lease lets you rebuild your credit faster so you can upgrade your car or refinance sooner at a better rate.
Too Many Credit Inquiries
Dealers and bad credit car loan websites often ‘shop’ your credit to many lenders – and may even tell you that it’s to your advantage. In reality, it often hurts your credit.
- Too many credit bureau inquiries over time can reduce your credit score.
- To a lender, all these credit inquiries suggest that you’re desperate and have been turned down repeatedly.
- You’re likely to end up with less favourable financing terms if you’re approved at all.
is the Better Way
Instead of guaranteeing 100% approval, we regularly provide auto financing to people who’ve been turned down by places that do.
We’re an established credit company (since 1991) with real locations, an inventory of carefully selected vehicles and a friendly, knowledgeable team of automotive financing specialists who work with you from start to finish – and are here for you during your term.
We believe you’ll have greater success in a fresh vehicle with fewer kilometres – and less likelihood of costly repairs that can knock you off course financially.
At Ezee, we structure financing with the shortest possible term – and give you the option to lease. By successfully finishing your payments sooner, you improve your credit – and qualify for better rates more quickly!
We use a very selective credit inquiry process that’s designed to help you succeed – not hurt your credit score