Financing a New Car with No Credit Auto Loans | Auto Credit ...

Even with poor credit you may have the opportunity to finance something other than a low mileage used car

Vehicle choices

Lenders that deal with car buyers who are credit challenged sometimes offer the choice of financing a new vehicle.

We know because we?ve spent over twenty years dealing with auto shoppers with less than perfect credit here at Auto Credit Express. We even designed our website so that these same individuals can understand such issues as car loans after bankruptcy and FICO scores as well as today?s topic, the advantages of financing a new car even if you?ve experienced credit problems in the past.

Dealer differences

Unlike tote the note dealers where your job is your credit, the car lots that offer loans that can help you establish your car credit are franchised new car dealers. Due to the current economic recovery, the number of banks offering these types has increased to dozens of national, regional and local lenders and they?re offering a larger number of loans every month.

Since many of the programs they offer include the possibility of financing a new car and the dealers that offer them sell new cars, this means that in some instances, auto loan applicants might qualify for a new car.

And while the lending requirements for these types of loans are much stricter than a typical auto loan, there are still quite a few new car models that often qualify for these programs.

New car advantages

There are, of course, a number of advantages to buying a new car:

1.?? ?They typically come with a comprehensive new car warranty
2.?? ?They often come with free roadside assistance
3.?? ?There is usually the option to purchase an extended warranty to cover the entire loan term.
4.?? ?Buyers usually have a choice of colors and options.

The disadvantage

The biggest drawback to purchasing a new car is depreciation. Typical new cars will lose at least 15% of their value as soon as they?re driven off the lot. This means that most of your payments during the first half of the loan will be lost to depreciation. This means you?ll usually be ?upside down? in the loan for the first two and a half years of a five year loan.

But you can also reduce this problem by either making a down payment of at least twenty percent or reducing the length of the loan from 60 months to 48 or even 36 months.

The Bottom Line

Choosing a new car definitely has its advantages. They are more reliable and also come with warranties and other nice perks. To offset the issue of negative equity, you can either shorten the loan term or come into the loan with a down payment of 20 percent or more.

Also remember that Auto Credit Express helps people who have experienced credit difficulties find a dealer for their best chance at an auto loan approval.

So if you really want to get your auto credit on track, you can start now by filling out our online auto loans application.

Tags: Bad Credit, New Cars, no credit auto loans

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