What To Do If You're Broke and Need A New Car

Almost everyone needs to use financing or leasing to buy a new vehicle, especially since the economy is down the toilet for the most part.

In a few cases, buyers use "direct lending:" they get a loan immediately from a finance company, bank or credit union. In direct lending, a buyer agrees to pay the amount backed, and an agreed-upon finance charge, over a time of time. Once a buyer and an automobile dealership enter into a contract and the purchaser agrees to a car price, the buyer uses the loan proceeds from the direct bank to pay the dealership for the car.

In a dealership financing agreement, a buyer and a dealership enter into a contract where the purchaser agrees to pay the amount subsidized, and an agreed-upon finance charge, over a time of time. The car dealer may hang onto the contract but more often than not sells it to an assignee, such as a bank or credit union, who will then service the account and collect the payments.

There are advantages for shopping for your car lease or auto finance over the internet if you have bad credit.

Convenience
Patrons can shop for financing from a lot of different sources ( regularly from one website ), from the comfort and privacy of their own home.


Special programs
From time to time, online loan entities may offer inducement repayments to buyers who have acquired a loan with them formerly, or are doing business with a partnered company.


Low overhead
Some finance firms are now "internet only" which permits them to have extremely low overhead. So they have a tendency to pass the savings on to their clients in the way of lower interest rates, and to their employees in the shape of better salary.


Multiple financing relations
The dealership's relations with a number of banks and finance companies mean they can offer buyers a range of financing options.

One disadvantage of waiting to finance thru a dealership is the purchaser may get "car fever", and step into a financing situation that is less than optimal, in order that they can "drive the automobile home today".  Vehicle salesmen are quite conscious of this potential, and will infrequently help the shopper's emotions get the best of them.

It makes sense to leave your emotions at home when you are shopping for a new or used car as you are already in a sad state of affairs with your bad credit hanging over your head.