Once upon a time it was said that you won’t be able to get a car loan if you don’t have a good credit standing. But like everything times have changed and that statement is no longer true. The market has changed and so has the demand and this created the availability of auto loans for extremely bad credit. That’s right; contrary to what you may have heard or believed even people with a terrible financial history can get approved for an automobile installment loan.Granted I am not talking about a low interest loan or a brand new luxury vehicle. However the fact remains that a consumer with a credit history that may be considered by some lenders to be horrible credit can purchase and finance an automobile. Although the terms of the advance may be unconventional and seem outrageous to person with stellar credit, but at least there are options for a person that sorely needs a dependable mode of transportation.These types of auto loans for disastrous credit are not available at your average car dealer. They are a specialty offered at Buy Here Pay Here (BHPH) auto dealerships. Typically these retailers only sell used vehicles, but more and more new car dealerships are starting to operate separate divisions of their business to cater to this customer. However only used cars are offered to these credit challenged buyers to reduce the risk to the dealership.The secret to providing automobile loans for those with very bad credit is what is commonly called “In House Financing”. This is a practice where the selling dealer not only sells the vehicle, but they also fund the loan. No outside lenders or other financial institutions are involved in the process and all decisions to approve or reject the applicant/buyer are done in house. The dealer is the one responsible for approving the vehicle installment loan and they are also responsible for recovering the vehicle if the lender defaults on their loan.This unconventional method of financing automobiles is becoming more popular because the traditional auto lenders have become more stringent when it comes to approving those with bad credit. However there are what is commonly called “Secondary Lenders or Sub-Prime Lenders” that will finance borrowers with weak credit that require a substantial down payment and other stipulations that make this option less than desirable for the car buyer that is already financially compromised. These types of lenders have strict credit score minimums and the best option for getting an auto loan for those with very bad credit is usually in house financing from buy here pay here dealers.The Upside of Bad Credit Auto LoansYou might ask how can there be an upside to having bad credit and buying a car, but there is and if you haven’t been in that situation it is hard to comprehend. Imagine if you will a person that has been out of work for an extended period of time because of an illness, laid off of work because of the economy or some other reason and they don’t have an income and limited savings like so many Americans today. This lack of income and savings can quickly destroy your credit score if the bills aren’t being paid and it can even result in a vehicle repossession which will severely lower their standing.It is said that the one of the top reasons for bankruptcy today is outrageous medical bills. Once a person gets back to work whether it is for medical reasons or lack of work rebuilding their credit score can take years. But having a dependable vehicle is a necessity for most people to get back and forth to their job. Without the ability to get an auto loan for extremely bad credit these people might never recover financially. This is just one scenario where buy here pay here dealers provide a valuable service to the automobile consumer when conventional lenders turn their back.
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