Abuses by Bad Credit Auto Loan Lenders in Dealerships

People with bad credit may most of the time get too excited about the possibility of getting behind the wheel despite having bad credit. Little do they know sometimes that not all car dealers and lenders who are willing to entertain their predicament are good guys. Here are some things that borrowers with bad credit should keep in mind the following points.

Bad credit auto loan lenders make the borrower sign a sort of a contract. The contract in this scenario contains the phrase "subject to financing." Borrowers would often ignore this as they focus on the illusion that they are already signing the final contract. The car buyer would sign the contract and drive the car home. After some weeks, the car dealer could call the car buyer to say that the contract "fell through." The buyer then would have to return the car and reapply for another car loan with higher interest rate - something that bad credit auto loan lenders already know they deserve from the start.

Car dealers sometimes inform the borrower that he or she needs a co-signer to get approved. Although this is true and sometimes recommended Car dealers tend to do this if they see that the borrower has a really bad credit. To secure themselves financially, they would use the co-signer's name - someone who has a good credit - in the loan. Although the borrower would be able to make good payments for the loan, it could help improve his or her credit score at all because the loan is still partly in his or her name.

 

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