Car dealers hate us... You'll Love us!		Jeff's $avOmeterTM $9,033,361 Add your savings HERE!
Search CarBuyingTips.com Buying New Cars How To Buy New Cars Buy Cars Online First Time Car Buying Tips Hybrid Car Buying Tips Extended Auto Warranty Tips Canadian Car Buying Tips Top 10 Car Dealer Scams Military Personel Car Buying Our Reader's New Car Deals Auto Finance Auto Loans, Tips & Scams Auto Refinance Tips & Scams Bad Credit Auto Loan Tips Used Car Loan Tips Get Your Credit Report Online Car Insurance Buying Tips Used Cars Vehicle History Reports How To Buy Used Cars Selling Your Used Car Used Car Classifieds Auto Auction Buying Tips Auto Leasing New Car Leasing Tips ALG Residual Values Car Leasing Software Reviews Government Sites Attorney General Sites DMV Sites - All 50 States Drivers License Sites Take A Break Rate Your Dealer Experience Free Spreadsheet Downloads Humor: Alternate Car Names RV Buying Tips & Scams How To Jump Start A Car LoserCars.com Crash Of The Month Gallery Furniture Buying Tips	Bad Credit Auto Loans, Tips and Scams To Avoid Auto Loan advice for people with bad credit What you'll get from this guide to bad credit auto financing: Strategies for people with bad credit, tips to increase your credit score How to increase your chances for approval in new car loans or used car loans How to get your Credit Report WITH YOUR CREDIT SCORE, and cleanup your bad credit before new car financing Online car loan rates from sites like AutoCreditFinders or CarsDirect Car Loans who help people with bad credit find auto loans How to Get a bad credit auto loan, Where to get new car financing for people with bad credit Auto refinancing tips for people with bad credit who got scammed by a car dealer to lower interest rates on your current car loan What to expect from the car dealer when you have bad credit Some lenders like ELoan will only approve you if you have a prior auto loan in your credit history. If you have bad credit, I bet these scenarios below have happened to you when you bought a new car from a corrupt dealer, as many CarBuyingTips.com visitors with bad credit have reported. The dealer charges you a very high interest rate APR (much higher interest rate than you should have paid), and lies to you about the bank "requiring you" to buy the extended warranty, the credit life insurance, the glass VIN etching, and probably lies to you about your credit score, telling you it's lower than it really is. Or maybe with your credit so low you were rejected, so the dealer tricked you into a co-sign auto loan but tricked your co-signer into being the borrower with a little sleight of hand during paper signing. Since you know you have bad credit, and are low on self esteem, and you have been turned down by other lenders for bad credit or high debt loads, the dealer's Jedi mind tricks sound believable so you agree to sign up for all this, not knowing the devastation on your financial future. You become upside down on your bad credit car loan, and deeper into debt, most likely with monthly payments you can't handle. Then you get the dreaded call from the dealer 2 weeks later (he pulled the Spot Delivery Scam on you) and delivers bad news that your auto financing fell through and your payments are going up. Then you find out a few months later from the angry lender of your old trade-in, the dealer did not pay off your trade. How many of these scams have happened to you? Many of these scams are reported on our annual Top 10 New Car Dealer Scams chapter. If your credit is really bad, work out your car loan first, and choose your car second You know my opinion, if your credit is bad, don't buy a car until you cleanup your finances. Sometimes people with really bad credit are blindsided by the fact that if your situation is really bad, you don't have a choice on cars or dealer brands. People forget that buying a car is a privilege, not a God given right. This challenge in getting you financed occurs because your high risk online car loan application is sent to a few dealers for them to report back which of their affiliated lenders is willing to risk giving you a bad credit auto loan. You'll find for example that you are trying to finance a Toyota Camry, but your local Toyota dealer cannot find a lender to approve your car loan. But a local Honda dealer across town is looking at your application and has found a lender willing to provide auto financing to you. This is why you don't always have a choice on car brands, and you might have to work out the auto loan first, and choose your car second. That's life at the bottom. Usually your minimum monthly income should be $1500, otherwise don't bother applying for an auto loan anywhere. If you can clean up your credit score to 680 or above, these problems will disappear. AutoCreditFinders helps you find bad credit auto loans If your Credit Score is < 600 or you don't have a past history of auto loans, don't submit loan applications that get rejected, dropping your credit score even further. Apply to AutoCreditFinders, they find "bad credit car loans" for you. They get you new car financing from high risk lenders, with decent online auto loan rates, even with a bankruptcy. If your score is > 550, no bad credit for 6 months, AutoCreditFinders Bad Credit Auto Loans can help you establish credit with lower online auto loan rates than dealers. CarsDirect Car Loans is another site who help you. If you had bad credit in the past, but now you make more money, you'll find you are cash rich, and credit poor. Then a bad credit auto loan might be your only hope. You fill out on online app in 30 seconds, and they connect you with a car dealer near you who might get you financed under your current difficult conditions. Why car buyers with bad credit get raked over the coals It alls boils down to ignorance, lack of information, high debt load, and low credit score. You don't notice the veil being pulled over your head, you don't see how you are descending into the burning depths of bad debt and despair, not realizing you lose $4000 to $6000 every time you trade in a car, all you know is you are getting out from one bad upside down car loan and into another car loan with lower payments, but 72 or 84 months on the loan. Your problem is you are focusing on the monthly payment instead of the selling price of the car, and the items that make up your monthly payment, and how you can reduce your monthly payment. The reason you lose out every time is you don't have the same information the car dealers have about your own credit history. That is why we here at CarBuyingTips.com, will educate you so this won't happen to you. If you have bad credit, you should get the web download Fresh Start: The Authoritative Guide To Consumer Credit Repair from Horizon Unlimited.

If you fail to prepare, then prepare to fail
The biggest new car financing mistake buyers make is trying to buy a new car without checking online auto loan rates or knowing if their credit history can support that action. The bottom line is you better know BEFORE you visit any car dealer what APR car loan interest rate you should be paying, and you better know the current state of your credit history, good credit or bad credit. If it's bad, you better fix it before buying a new car. A big source of emails we get are from people with auto financing issues, whose new car loans fell through at the dealer. If you have bad credit, you'll never ever get 0% financing auto loans from those 0% APR ads. Read the fine print, you usually need stellar a credit score over 720. Applying for new car financing without knowing your credit score is the dumbest thing a new car buyer can do. Use our car loan payment calculator tools to play on even ground with car dealers and verify their numbers to make sure they are not payment packing your auto loan.

Avoid financing extended warranties and extras into high APR loans
Many people with bad credit make this mistake. If you know you are paying 18% APR, then forget about adding items like Warranties and Window VIN# Etch, and insurance into your loan, why pay 18% on those too? That just digs you a deeper hole. You can buy them after the fact direct without middleman car dealer markups, and no 18% APR.

How to get bad credit auto loans

First of all, I'll give you my advice if you have bad credit: don't buy a new car right now. Wait a little while and repair your credit yourself using our credit repair tips on our other site DebtWizards.com and avoid credit doctor scams. You can improve your credit score tremendously and quickly the first month using our strategies. Then buy your car later once your debt balances are lower and your credit score is above 600, and you have 20% to put down. The reason you need 20% down payment is cars typically depreciate about 20% the first year, and if you put down 0%, you'll be 20% upside down after the first year. You never want to be upside down on a car loan. That is why you are in trouble in the first place, you bought the car you have now with no money down, trading in another car that you were upside down on to lower your payments, only your payments really did not get lower.

Get Your Credit Report & Credit Score Online
You can run your own credit report as often as you like without affecting your credit score. But don't keep applying for credit, as that WILL lower your credit score. It's crucial for you to get your credit score so the dealer cannot lie to you. If they lie and claim your credit score is 550 when you know it's 650, you can pull your real credit score out of your folder and make them eat their words. Forget about the free annual credit reports, because what you really need is the credit report with the credit score, which you have to pay for. No web site gives your credit score for free.

What Should My Credit Score Be For Approval On A New Car Loan? Who should I apply to?

• If your credit score is > 680 (prime borrower), you'll likely get the lowest APR car loans at discount online lenders Capital One Auto Finance and HSBC Auto Finance!
• If your credit score is < 680, you are "sub prime". You'll pay higher APR on your auto loan, try applying to AutoCreditFinders or CarsDirect Car Loans
• Below 550, you can forget about a car loan, or even a bad credit auto loan through any lender or car dealer. No one will touch you, blood from a stone...

New car finance Rule: Don't trade in a car that you still owe money on

I get complaints from people who traded in a car they owed money on for new car financing and 2 months later were shocked to hear the new car dealer did not pay off their car loan in 10 days as promised. With this scam dealers pay you less for your trade. When the bank calls, YOU are responsible because the old car loan is still in your name, until the dealer pays it off. If you trade a used car in for new car, make them verify it in writing that they'll pay off your car loan in 10 days, or no deal.

Online Auto Loans: Getting the lowest Auto Financing APR

According to the Consumer Federation of America, car buyers are often overcharged by 3% on their loans at the dealership, which can add $1000 to the life of their loan. Your best sources for new car financing ONLY IF YOUR CREDIT SCORE IS HIGHER THAN 680 are new car loan sites such as Capital One Auto Finance (who I used in 2004 and it was smooth as silk. Read How I Saved $5500 Buying my new 2004 Lexus GX470 SUV for more info) and HSBC Auto Finance. With the lowest online auto loan rates, they usually beat dealers, no application fees, or down payments. Your new car loan is approved in minutes. These are not bad credit auto loans. Get your online auto financing quotes, compare to dealer auto financing, use whoever has the best car loan interest rate. Online auto loan rates are the standard for dealers to beat. Use online car loan payment calculators and choose your best auto financing.

"Subject To Financing": why the dealer called you 2 weeks later to re-sign your auto loan

New car financing at the dealer can be a headache. The "Subject to Financing" clause appears on paperwork of all new car loans. It means the deal is not done, yet you think you are signing a contract. Then 2 weeks later the car dealer calls saying "your new car loan fell through." They knew what APR you qualified for when you bought the car, a common auto loan scam, usually pulled on people with bad credit. You should not buy a new car first then worry about new car financing. Sometimes dealers call and say they found you a lower APR, come on back down and re-sign the paperwork! Oh, Really? Have them fax you over all the new figures and APR in writing, and make sure they did not increase the number of months, or payment, or anything. Otherwise do not re-sign any contracts. This is why we are big proponents of online new car loans. Don't get stuck with a bad credit auto loan if it's not necessary. This would have been avoided if you used online auto financing.

Car loan payment calculators

We have a car loan payment calculator for you in our Free Excel Spreadsheet Download Area. That car payment calculator is easy to use, with 4 loan scenarios on one 8x10 printout, allowing you to make quick decisions about your auto loan. If you have a PocketPC type PDA, download our Car Loan Payment Calculator for Pocket Excel. Use our spreadsheets to compare online auto loan rates to the car dealer auto loan rates. Many people have told me they used our spreadsheets on their laptop or PDA to catch the car dealer cheating on the car payments. New car financing just got easier for you.

Keep your debt to income ratio and credit balances low
It's crucial before you attempt new car financing, get ALL your credit card balances below 50% of your credit limit or they lower your credit score. You pay on time but can still have a low credit score if balances are too high, or if you applied for credit recently, or if you have too many open accounts. This surprises many people applying for auto loans who get rejected. Get your debt to income ratio below 30%, otherwise banks stick you into a bad credit auto loan.

Bad Affect Of Low Credit Scores on your new car financing
Your credit score determines your new car loan approval and your car loan APR. If you have bad credit and your FICO score is low, you'll pay high car loan interest rates, up to 23%, with a bad credit auto loan. Your bad credit score also affects how much you pay for car insurance rates. People with bad credit have no clue about this, maintaining your credit score should be an ongoing process, not a rush job when financing a new car. Banks will reject you if you have disputed items on your credit report, until it resolves. It can take 60 days to clean up your credit score, so don't apply for new auto financing until all disputes are resolved and you verified your FICO Score. You have been warned! I have seen people rejected for applying while "in dispute." Then they get stuck with bad credit auto loans.

How to increase your car loan approval chances

• If you're a recent college grad, don't apply for new car loans until you're at your new job at least 6 months
• You must have > $1600 monthly income
• Learn how to repair bad credit yourself, try to get your credit score to 680 before you apply for new car loans
• Pay down your credit card balances as low as possible, payoff higher APR cards first before applying for auto loans
• Don't apply for new car loans if you have bad credit, moved in the last 6 months. Lenders hate nomads, they verify addresses & income
• A previous new car finance or home mortgage on your record helps
• Get a stable occupation like engineer, architect, finance, etc. Self employment is very difficult to get approved
• Haggle with your current creditors to get charge off's, late payments, other black marks off your credit report before auto financing

Steps to take before you apply for new car loans:

• Get your Credit Score so dealers can't lie to you about your score. Flash it in their face when they lie to you about your score
• Start comparing online auto loan rates to new car dealers, use car loan payment calculators
• Close old unused credit accounts, they are excess luggage dragging down your credit score, but leave your oldest account open
• Remove erroneous previous addresses and other errors off your credit report before attempting new car financing
• Wait until your score goes up to 680 if you expect to aim for lowest rate car loans

The Straw Purchase car loan, don't do a co-sign!

This is the dark side of auto financing. A straw purchase refers to a person buying a handgun for someone who is ineligible to own one. That's how the Columbine High School shooters got their guns. With new car buying, the dealer tells you that with your bad credit, you can't qualify for the auto loan so you need a co-signer. No problem, Grandma will do it for you. But Grandma is duped by the dealer paper shuffle and 2 weeks later you find out there is no co-signed auto loan, they wrote the auto loan in Grandma's name! This does not restore your bad credit like the dealer told you. Her name is on the title, and it's illegal for you to buy insurance on a new car that is not titled to you. How To Avoid The Scam: Have both signers present, auto loans should have both signatures together. A notice to the cosigner is required by the Federal Trade Commission's Trade Regulation Rule on Credit Practices. With bad credit you should try a cheaper used car, with a used car loan.

Don't Just Borrow Your Way Out of Debt!
Consolidation loans are DANGEROUS, because you shift all your debt from one place to another, OPENING A NEW CHANNEL OF CREDIT, while freeing up your credit cards. Some idiots proceed to fill up their credit cards again, now they have double the debt they started with, paying up to 22% on their consolidation loan because they weren't paying attention to the APR. Some unscrupulous consolidation companies make it appear they are eliminating your debt, or hide the APR. It's better to transfer you credit card balances to your lowest APR card. Pay more to cards with high APR, send more than the minimum payment, or it will take 10 years to pay it off. If you have cash in the bank earning 2%, it's losing you more to income taxes, so be smart and use it to pay off 18% debt. A home equity loan can pay off credit cards, and write off the interest on your taxes. But you MUST close those cards, or risk running them back up. We cover all this in much more clear detail on our other site DebtWizards.com

Auto Financing for First Time Car Buyers And College Students with bad credit

Some dealers have first time buyer/college graduate auto financing programs subsidized by carmakers. Sometimes there is no recent grad new car finance program, they just charge you 18% APR for new car loans. If you have good credit history, there's no reason to pay 18% in a bad credit auto loan, they are feeding off your ignorance and rejection fears. You have the same haggling rights I do, don't let any salesman tell you otherwise. If you work at your college, try an auto loan through the credit union, a good place to establish credit. Don't let your parents buy the car cash, or finance under their name, it wont establish credit for you. Pay down your debts and clean up your credit score before applying for a car loan. The key to stability is living where you can afford the rent, even if it's not up to your standards, so you don't have to move. If you move around you become un-creditworthy, and might only be bale to get a used car loan, or a bad credit car loan.

Don't Forget Auto Insurance
You'll be surprised how much some new cars cost to insure. Get your auto insurance quotes before you buy a car, and plan your budget to include insurance. If you're buying a car on the hairy edge of what you can afford, insurance payments will drag you under. Insurance payments are part of your monthly cost of ownership. Read All About Auto Insurance for buying tips, coverage glossary, how to avoid scams, reviews of free auto insurance sites. Auto insurance sites Comparison Market, GEICO and Progressive Auto Insurance give you free online auto insurance quotes, so be sure to get pricing from them too.

Go On to Chapter 2: Discount Car Buying & Car Pricing On The Internet

Jump to any chapter. I suggest you read each chapter in order.
Chapter 1 Get your credit report, how to get a car loan, scams, online car loans,first time car loans, budget & loan excel spreadsheets, credit repair.	Chapter 2 Reviews of internet discount car buying sites, new car prices, find dealer's invoice cost. Get a new car quote.	Chapter 3 What to bring to a dealership, what to say, how to act, what not to do, what to look for at the dealership, and a glossary of all dealer fees.	Chapter 4 How to read dealer invoices, finding dealer's cost, how much to offer the dealer, buyers offer spreadsheet, examples, trade-ins.
Chapter 5 Negotiating tips, dealer scams & tricks to watch out for, dealing with aggressive salespeople, choosing between rebates or low APR loans.	Chapter 6 Close the deal, avoid needless extras, scams in the business office, extended warranty scams, options, buying warranties online.	Chapter 7 Actual misleading dealer ads, and what to do when you've been ripped off, customer satisfaction surveys, how I bought my Lexus.

The information on this site is Copyright © 1996-2008 ConsumerNet, Inc. This site is solely for your personal use. You may link to these pages or print them out for your own personal use, but no parts of these pages can be reproduced, sold, or transmitted in any form without explicit written permission. By copying or paraphrasing the intellectual property on this site, you're automatically signing a binding contract and agreeing to pay a fee of $10,000 per instance per week payable immediately.