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People with bad credit usually run into problems while looking for a dealership that’s willing to help. The fact of the matter is that if your credit is in a really poor state, most dealerships cannot serve you. Here are a couple of reasons as to why most of them are unable to offer any assistance with difficult credit situations.
Not signed up with the right lenders – Sub-prime lenders are usually willing to approve applicants with bad credit. However, their programs are quite complicated which means that not every dealership partners with them.
Extra work in special finance – There are many dealerships who do not have the required manpower or may not know how to deal with sub-prime loans. The extra work can be an additional strain on the dealership’s staff.
Inventory isn’t right – Dealerships carefully select their inventory. However, many of them don’t hold the suitable type of inventory for special finances. In other words, it is not worth their time to devote attention to special finance when their inventory isn’t the right fit.
Here’s how you can find the dealerships that will help you
Looking for a dealership that can help you with bad credit or car loans isn’t easy, but it can be done. Search for a dealership with a specialized finance department that is tied with sub-prime lenders.
Another option is going to a buy-here-pay-here (BHPH) dealership. However, you should know that most places that work to finance people in-house don’t work with credit bureaus. This means that you can’t use these types of car loans to improve your credit score in the same way that you use a dealership with third-party sub-prime lenders to improve upon the same.
While BHPH dealerships look like an attractive option, you should keep in mind that these dealerships usually charge higher interest rates to offset the risk of lending to people with bad credit scores. However, if you’re sure you can afford it, then it is certainly a good option to consider. This is because you will be in a position to finance a car in situations where you normally wouldn’t be able to.