Let’s face it – not everyone has great credit. In fact, most people don’t – and it’s nothing to be ashamed of. There are thousands of reasons why you may have bad credit, but that’s not we’re going to go over today.
Get your Credit Report
It’s important to get your credit report and credit score before you go car shopping – I recommend that everyone do this. If you think you might have bad credit, it’s even more crucial to be prepared. If the dealer knows you have bad credit, and you don’t know the details, he can and will use this to his advantage. The most profitable car deals are to people with less than perfect credit – don’t fall into the trap!
Subprime vs Prime
So, you got your credit report and score – now what? People generally fall into two categories – prime and subprime. If your score is above 680, consider yourself lucky – you fall into the prime category. If you’re not so lucky and come in under 680, you are considered subprime. Subprime borrowers don’t always qualify for the best rates and financing terms – it’s a fact, and it’s something that you’ll have to deal with. What you don’t need to deal with is dealers taking advantage of your challenged credit, and pulling the wool over your eyes.
You don’t have to pay MSRP just because you have bad credit
Some dealers are so unscrupulous that they’ll tell a customer who has bad credit a horrible lie. The dealer will say that they have to charge full MSRP for the vehicle – that the bank requires it. This is not only wrong, it’s a bold-face lie. No bank has any stipulations on how much the dealer has to charge you for a car. They most certainly wouldn’t require you to pay full sticker price. If anything, they want you to pay less.
We can only get you approved if you buy the extended warranty
This trick is one of my Top 10 Dealer Tricks – and it’s a nasty one. Uninformed customers with bad credit make dealers like their lips with thoughts of crazy high profits. If a dealer ever tells you that the bank requires you to buy a warranty because of your credit – turn around and walk out immediately! Not only is this a lie, but you can be sure that you’ll be overcharged for the warranty. If you do want a warranty, get a quote online so you know what they’re worth. But don’t ever let yourself be forced into buying one – no bank ever requires it.