subject: Everyone Is Approved- The Truth [print this page] Everyone Is Approved- The Truth Everyone Is Approved- The Truth
Everyone wants a new car. Television, newspapers and even websites are filled with advertisements for sleak new cars, trucks and SUVs. Everywhere we look it seems like someone is driving a new vehicle. And why buy an older car with all the environmental regulations, safety inspections and repair costs, it seems to cost more for an old car these days than for a new one.
For most people paying $20 000 or more upfront for a vehicle is out of the question, so we have to resort to borrowing (ie a car loan). Getting a car loan is really the only way to go when it comes to buying a new vehicle. Most people have reasonable credit and can take advantage of those amazing deals you see on TV like 0% interest rates and $199 a month payments. Many people however do not have a credit rating that is up to par, so they have a tougher choice when it comes to financing a vehicle.
I have personal experience in this area. When I was 18 years old I thought it would be a good idea to get a new vehicle for work. Even though I needed a van for work, I decided to buy a car and instead of just buying the car I financed it through one of those "everyone is approved" car lots. It was one of the biggest mistakes I made and is still a blemish on my credit today.
If you are considering going to one of these "everyone is approved" car lots be aware!
I can tell you that the interest rates you will be paying if you have a poor credit rating are astronomical. In my situation I decided on a 6 year old Chrysler Sebring, the sticker price was $10900, the vehicle had 130 000 kms on it. Being the foolish young man I was I rushed it through, but realized after the fact that the vehicle was not worth near that price. What is worse is that with my credit at the time the interest rate was an incredible 29%, practically criminal. Ultimately with interest I would have had to pay $26000 over 4 years for a vehicle really onlyworth maybe $8000.
Yes it was a bad decision and I hope you can learn from my mistake. In the end my lovely sebring crapped out at 200 000 km- something to do with the transmission. Rather than spend $2000 on a new transmission I decided to cut my losses and return the car.
Dont make the mistake I made.
In most cases these "everyone is approved" deals are complete scams and not worth making your credit even worse than it probably is if you are considering this.
If you have absolutely no other means to get a vehicle and you absolutely need one this may be your only route. Just remember that depending on your credit rating the interest rates in these deals are usually anywhere from 18% to 29%. At these rates you will end up paying for the car more than a couple times over. Also as I mentioned even without the interest, cars at these lots are usually overpriced and a lot of the time these cars are complete lemons and wont even last the term of the lease. What is the point of making payments on a car that is completely broken down?
To add insult to injury most of these dealerships use what is called "front end loading" which means you basically pay for nothing but interest for the first 2 or 3 years of the term. That means in 3 years you may not even own half of the vehicle.
When you add it all up you are much better to save your money and actually buy a car in cash. You might also consider waiting until your credit is a bit better and then trying a real dealership where you pay a normal interest rate and the cars are certified.
Whatever you decide realize that a car is a large and important investment, one that like all investments should not be taken lightly.
