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Car Dealers in Detroit

Over the last couple of years many car finance companies for people with bad credit have either goneout of business or have stopped lending programs to people with bad credit. A few examples would include HSBC Auto Finance, Nuvell Credit Corporation, and ACC Consumer Finance.

During the same time many more Americans have seen their credit scores decline due to job loss or some other misfortunes occurring currently. So today more and more people need a second chance car loan and fewer and fewer lenders are still offering them. The lack of car loans to people with bad credit has hindered many car dealerships, forcing many of them to close their doors.

At the same time though, other car dealerships have started offering second chance car loans directly to people with bad credit. In other words the car dealership has become the finance company.

There are a few different second chance loan programs offered by car dealerships including car loans, auto leasing, and rent to own.

Second Chance Car Loans

With a second chance car loan the consumer is purchasing the used car. Most of the time the car dealership will allow you to borrow up to the purchase price of the vehicle, so you should anticipate having enough money to put down to pay for the sales tax and other state fees.

Bad Credit Auto Leasing

With bad credit auto leasing you don’t own the car so the transaction is taxed differently. Instead of paying the sales tax up front the amount is included in each payment. As long as the acquisition fee is small, you may be able to get a bad credit auto lease with lower money down than a bad credit car loan.

Cars Rent to Own

Rent to own cars are similar to the bad credit auto lease when it comes to taxation, but typically don’t have an acquisition fee associated with it. Second chance car dealerships with rent to own cars require pre-payment. So in other words you’re paying for the potential future use of the vehicle.

To protect their investment and ensure timely repayment, car dealerships that do offer second chance loans often place GPS tracking devices or vehicle shut off devices on the vehicle.