Bad credit car loans on the internet - a warning

[sah2]

Hi all. Now that I got my loan, I thought I should share what I learned through trial and error. The only car loan websites online that appear to be legitimate are Capital One auto finance and Up2drive.com. Both of them rejected me right off. Also Lending Tree, which just matches you with lenders. I applied to them and they matched me up with Capital One which had already rejected me and rejected me again, of course. All the "guaranteed car loans for bad credit" websites (myautoloan.com, carloan.com, fundingway.com, baf.com, web2carz.com, etc.) are just lead generators for dealerships. They say you are approved for a loan, but really they just forward your information to a dealership that has a "special financing" department which supposedly can help you. You still have to go in, pick out and apply for the car and you may or may not ultimately get rejected. Well, guess what? Every car dealership has a "special financing" department. The car I ultimately found was at of all places a luxury dealer that specializes in Porsches and the like! I found the car online (listed on Craig's list actually- thanks to someone on here who recommended I look there - thank you very much!), explained my situation and they were very accommodating and able to help me (as I mentioned in previous post, I had to use a cosigner, but they were able to advise me and guide me through the process). Web2carz.com, by the way is especially scammy- when you apply online you are directed to a free trial for credit monitoring which you have to fill out (and put your credit card down for) before you can get to the next step!

[sah2]

Oh, and I hear Roadloans.com is legit, but it is not available in my area, so I didn't apply.

[MeLLE159]

SAH2 did the cosigner allow for you to get a better interest rate? Could you have gotten approved without cosigner?

[sah2]

Well, not sure if I could have or not. I had run into a problem with a different dealer- the bank was saying I had to get my husband on the loan. The problem was not my credit, but my income. My monthly income is basically equal to our mortgage payment ($3000 a month), which is on my credit report. So even though I am only half responsible for the monthly payment, the full amount is on my credit report, so it looks like I am paying 100% of my income for mortgage. I did not want to put my husband on the loan due his own credit issues. I came up with the idea of my mom cosigning and she agreed. At this point, though I decided the first car was too much money and I did not pursue it. When I brought up the cosigner issue with the second dealership they advised me not to even bother trying to apply alone because even if they approved me, the interest rate would be really high. Since the rate I got was on the high side already, I imagine it would have been through the roof.

[ohbrother]

Thanks for posting. Can you share your credit score and what interest rate you ended up with? Thanks!!

[sunydoesitbe]

We tried 722Redemption and Roadloans because my car died and I have been desperate. The lady at 722 had no clue about bankruptcy and was super argumentative. I didn't want to do Roadloans, we did get approved but by then we just had a few weeks left. So we waited until discharge to see what we could do. Actually went the DAY I received it.
I went to a super large dealership here. I found a GREAT car. Way nicer than I thought I would be able to get. With a 15% interest rate at a PRIME lender. The payments are WELL with in my budget. It's not an expensive car but it's a new one we will have paid off pretty quick.
The F&I guy told us he felt if we had worked so hard to make payments on time to the crappy Buy here pay here place my husband had gotten stuck with we would make payments to him. He said he felt we deserved a 2nd chance.

[sah2]

I response to OhBrother- my credit score is somewhere in the 600s, depending on which reporting agency you go with- I think the lowest was 623 and highest was around 660. I got 13%. This is with a cosigner.

[sunydoesitbe]

That is awesome sah2!
My husband co-signed with me and he has NO credit. So I think we did fairly well with the interest rate.

[sah2]

Oh and USAA has a legitimate online loan application. My husband (who did not BK but has bad credit) was able to get approved at an amazing 5% interest rate and the whole process was super easy. I do not know if they are BK friendly. He is a long-time member, so I assume they cut him some slack that other creditors did not (he could not get approved anywhere else). I plan to try to refinance through USAA after 6 months or so.

[LSUTiger32]

Anyone who is willing to loan money to people who are days out of BK are loan sharks. Why do you think they are charging 15% plus interest?

They are all bad news.

[Flamingo]

Anyone who is willing to loan money to people who are days out of BK are loan sharks. Why do you think they are charging 15% plus interest?

They are all bad news.

Most people right out of BK know this but are in need of a vehicle. 13% and 15% car loans are high credit risk loans. A BK on a credit report instantly makes one a very high credit risk no matter what your score. What these folks need to do is that if they can actually afford the new loan with the high interest rate is to try to refinance a bit later on because that car will be so upside down in a few years they will get right back into the credit trap. Auto dealers are out to make money and when you walk in a dealership you are just a dollar sign - they will do anything and everything possible to get to get someone in a vehicle as they have to move those vehicles and work on commission/incentive.

[LSUTiger32]

Most people right out of BK know this but are in need of a vehicle. 13% and 15% car loans are high credit risk loans. A BK on a credit report instantly makes one a very high credit risk no matter what your score. What these folks need to do is that if they can actually afford the new loan with the high interest rate is to try to refinance a bit later on because that car will be so upside down in a few years they will get right back into the credit trap. Auto dealers are out to make money and when you walk in a dealership you are just a dollar sign - they will do anything and everything possible to get to get someone in a vehicle as they have to move those vehicles and work on commission/incentive.

If most people know it, why are they foaming at the mouth to get one? The notion that a loan is a requirement to own a car is part of why the economy in this country sucks. I just wish more people would come to the realization that there are a lot of very reliable cars out there that you can pay cash for and get where you need to get. I drive 80 miles a day in a $2,500 car that is going into it's third year for me. You don't have to get back into debt at an interest rate that makes it impossible to win to own a car.

[backtoschool]

If most people know it, why are they foaming at the mouth to get one? The notion that a loan is a requirement to own a car is part of why the economy in this country sucks. I just wish more people would come to the realization that there are a lot of very reliable cars out there that you can pay cash for and get where you need to get. I drive 80 miles a day in a $2,500 car that is going into it's third year for me. You don't have to get back into debt at an interest rate that makes it impossible to win to own a car.

No need to drive around in a clunker. If one works towards repairing his/her credit post bk, "normal" rates become possible quite quickly. I was just give a rate of 4.42% for up to 24k from Capital One. I am only 10 months post discharge. This rate is possible because I have worked to repair my credit post bk.

For more info see the following links to other threads.

http://www.bkforum.com/showthread.php?t=61550

http://www.bkforum.com/showthread.php?t=61056

[pris72]

We can't get approved to buy even a used car. Our chapter 7 was discharged on 6/14/2010. Someone told me that kia and hyundai are easier to get approved through with a BK on your credit? Anyone know if there is any truth to this? I applied through capitalone auto finance, and was turned down.I am not looking for a brand new sports car here, just a used low mileage car for now until we can build our credit back up enough to get approved for a new car through a major lender such as ford credit or GMAC.

[LSUTiger32]

No need to drive around in a clunker. If one works towards repairing his/her credit post bk, "normal" rates become possible quite quickly. I was just give a rate of 4.42% for up to 24k from Capital One. I am only 10 months post discharge. This rate is possible because I have worked to repair my credit post bk.

For more info see the following links to other threads.

http://www.bkforum.com/showthread.php?t=61550

http://www.bkforum.com/showthread.php?t=61056

BTS....knowing you over my time here I gotta say this is pretty shocking coming from you. Who said my car was a clunker or that if you paid cash for a car it was one? I mean it's not a Porsche or anything but it's a decent looking domestic car with leather seats, a moonroof and get this a CD player! I mean I know you automatically have to assume that a $2,500 car probably has an 8 track, but no! Enjoy that car note and $5,000 down the tube to Crapital One in interest payments. I could buy two nice cars with that money!