BHPHAutoDealers – Bad Credit Car Loans – Getting a Better Interest Rate by Jenny Bunn

BHPHAutoDealers - Bad Credit Car Loans - Getting a Better Interest Rate   by Jenny Bunn

Jenny Bunn, Contributing Editor

Whether you are securing financing on your own, the dealership is handling it for you, it is important to explore all of your options. Even if your current vehicle is ready to fall apart and you have been waiting a couple of days to hear the salesperson call and tell you to pick up your car, you need to slow down.

It is those with bad credit who get taken advantage of when it comes to financing. You likely already know you are going to get nailed with some ridiculously high interest rate but do you know how much that rate gets increased in the finance office at the dealership?

The back of the house typically makes the most money on a car sale, especially with people who have bad credit. If the lender is already charging you an 18 percent interest rate and the finance manager marks it up to 19.75 percent, are you really going to complain? Will you even know? Stop coming across so desperate and let them know you expect them to find you a better rate. There are enough alternative financing options today that you don’t have to settle for the first one you are offered. Yes, the finance department should make a profit for their hard work, but they should not be paying their hefty car payment off the commission from your deal.

You may find that you don’t even need alternative financing. There are some things that will work for some people to get bought by a traditional lender. You will still have a high rate but not nearly as high as you would with alternative options.

Get a Co-signer

A strong co-signer can get you approved in the blink of an eye, and at a much better rate at a bhph auto dealer. Wouldn’t it be nice to have a lower car payment? Of course, you probably feel awkward asking for help but you may be surprised at those who are willing to put their faith in you, especially if they know you are a hard-worker.

This will allow you to build your credit with a reputable bank while saving money on your car payment. Hopefully, a year from now, you can refinance the car solely in your name since you have proven your credit worthiness to that lender.

Put More Money Down

The more you put down, the more invested you look in the vehicle. The more you have invested, the less risk there is of you defaulting on the loan. Sometimes if you even go back to the lender with a few hundred dollars, just to prove how hard you are trying, it could earn you a small decrease in the interest rate.

Don’t be afraid to hit the used car manager up for a little more for your trade too. He may not have a lot of room to budge but $100 more for your trade and $100 more out of your pocket might make a significant difference. If the dealer thinks they are going to lose a sale over a small amount, you may be surprised at what a sweeter deal they offer you, especially at the end of the month when they are trying to make their quota.

It is also important to note that dealerships have a lot more leeway with the cost of used cars than they do new ones. While you may assume that there is a tremendous amount of markup on new vehicles, there’s really not. If a salesperson tells you they’re at invoice, there is a good chance that they are. Used cars is where a dealership makes all of their money and it’s typically where you are going to want to shop if you are going to need to do some negotiating for the best interest rate.

Learn about Buy Here Pay Here Car Dealers and Interest Rates at


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