How to Get Approved For a Car With Bad Credit

Most people don't know how to get approved for a car with bad credit. Some think that the best place to get financing arranged is a car dealership.

This is not true.

If you have bad credit, you can get approved for a car easier if you do not use the dealer finance department. That is a 100% fact. Why is this? Loan companies that specialize in working with people with bad credit to get bad credit car loans actually prefer, to deal with customers directly.

Why?

It's simply because if you are working directly with them, you are seeking to get your financing arranged prior to shopping. It shows that you are being responsible.

Most people don't know...

Car dealerships make money on loans that they get approved through their finance office. It's called "backend profit". If you get approved at 9.5%, the finance manager will "add points" to your loan. They will tell you that you are approved at a higher rate, like 13% or more. The 9.5% is the "buy rate" and the 13% or more is the "sell rate".

The difference between 9.5% and 13% is called dealer profit. Plain and simple.

This raises your car payments.

When you arrange your financing directly, you get approved easier and with lower payments because there is not a dealer "adding points" to your car loan.

Also, you are able to focus on getting the car you want at the price you're willing to pay, rather than having to be focused on "getting approved".

Regardless of past credit history... it's 10 times easier to get a car loan if you arrange your financing directly with a lender and it's easiest to do it online.