In-house financing at car dealerships can be a very great option for people who do not have sufficient credit scores. If you are tired of being denied by banks when applying for car loans, this may be the route for you. On that note, here are some really good reasons why.
Get the car you want
You may have wanted to own a specific car for a while, but have not had the money or credit rating to purchase it. Car dealerships that offer in-house financing will have loan offers suited to fit your budget. Since you are purchasing the car directly through them, they will be able to do more for you on a personal level. With the dealership not going through a third party bank for financing, they will have more flexibility.
In-house financing will require you to make your payments on a biweekly or weekly basis. This may be easier for you to remember versus if you were making payments once on a monthly basis.
The dealership may give you a loan that extends your payments out seven years. Other dealerships with financing through third party banks will only allow your loan to be for six years at most. Therefore, though the interest rate may be high, your ability to make the payment will be greater with a seven year loan.
If you consistently make your payments on time for a specific time period, some in house financing dealerships will let you refinance your loan. To refinance a loan, according to Investopedia, is to replace an older loan with a new loan offering better terms. This would mean lower monthly payments for you along with an extension to when your loan needs to be paid off.
The dealership with in-house financing will also have special incentives to help you get the car you want. An example of an incentive that may be offered to you would be a very low interest rate on a brand new car. Dealerships always focus more on selling unused cars. Therefore, you may just leave the lot in a car that has only been owned by you.
Build your credit
As long as the dealership reports your consistent payments to the credit bureaus, your credit score will rise. Also, if you pay on the loan for seven years, you have a chance at pushing your credit into the 800 range. This will be possible as long as your credit with other debtors is good.
As you can see, choosing in-house financing can be a blessing for your transportation needs and credit rating. Therefore, if you need a new car and do not have over a 620 credit score, consider giving in-house financing a try.