One of the most frustrating parts about buying a car when you have bad credit, is having to deal with the dealership finance department. It seems that you can get a straight answer and there isn't really any good information advising you on how to get the best deal.
Getting a bad credit car loan direct, allows you to work with lenders without a middleman.
Most people don't realize that the finance department of a car dealership acts as a middleman. They were the salespeople for your auto loan. Being the salespeople for your auto loan, they make a commission based upon the interest rate that you pay.
Car dealerships make money on the sale of finance products such as extended car warranties, gap insurance, credit life insurance and other products, as well as your interest rate. It's typical that a dealership actually makes more money on your interest rate than they do on the actual sale price of the vehicle. The dealership may make $2000 on the sale price, and make $4000 on your interest rate.
You see, when you get a car loan the dealership and are approved by loan company and of particular interest rate, the dealership can add percentage points to your interest rate. The additional monies that you end up paying in finance charges are unnecessary. They are simply to give the dealership and incentive for sending the loan to a particular loan company. The more money that they can make the loan company, the more business that they will send to them.
In summary, dealerships make a commission on the additional finance charges that they can get you to agree to pay. The unfortunate part of this is, the average everyday person has no idea that this even takes place.
There are companies on the Internet that can provide you with a direct car loan. Regardless of your past credit history, even the no money down car loan for bad credit is easily obtainable with some companies.
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