What is the point of car financing for those with bad credit?

1. 61

   McQueen3486posted 13 years ago

   If you still need to find a co=applicant on your application?
   
   Isn't the purpose of bad credit financing to help those that don't have that options? Just curious, because my best friend was trying to buy a used vehicle, and she went through a company that caters to those with bad credit, and she still didn't get APPROVED. That makes no sense. How are you helping her? How is she supposed to get her vehicle?

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      cr00059nposted 13 years agoin reply to this

      There are many benefits to this if it works out well.  Its like a monopoly game.  If a worse case scenario happens..  Lenders will charge higher interest rates, and if buyer cannot pay, car will be re-possessed and quite possibly sold for high profit margins.

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2. 61

   McQueen3486posted 13 years ago

   To me, it just seems redundant.

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3. 60

   knolyourselfposted 13 years ago

   Would you give her credit and lend her the money? And what would be the conditions of same?

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4. 61

   McQueen3486posted 13 years ago

   Well, the point of it is financing for those WITH bad credit. It's fair to discriminate to everyone. Some people can't afford to pay straight up for their vehicles, and heaven forbid someone wants to turn their life around. Would I give her the money? YES. If I worked in financing for those who can't get otherwise, I would.

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5. 60

   knolyourselfposted 13 years ago

   Anybody can say anything. The point is you didn't. Put consequence where your mouth is.That way you might get a better understanding of your problem - or watch Judge Judy.

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      McQueen3486posted 13 years agoin reply to this

      Is there a reason that you're being particularly bitter towards me?
      No need to insult me, thanks. Appreciate it in advance.

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         psycheskinnerposted 13 years agoin reply to this

         No one is being bitter.  We just know what finance companies really do, not what their chirpy TV advertisements pretend they do.

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6. 65

   psycheskinnerposted 13 years ago

   The point is to give them a chance to fix their credit, without ripping off the retailer--which if their credit really sucks often requires the help of a family member or other guarantor.
   
   They screwed up their credit, they need to fix it. Retailers and load companies are businesses, not charities.
   
   If you really would give her the money and trust her to pay it back--you can co-sign the loan.

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7. 61

   McQueen3486posted 13 years ago

   What would make you think they're trying to "rip off" someone?
   If you're going to be a smart ass bitch, then you can stop responding...k?
   
   All I'm saying is I can see it from the person's point of view as well, not just the company.

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8. 61

   McQueen3486posted 13 years ago

   I forgot, you're a financier..right?
   
   I was asking a question. I feel like there is no need to be greedy, and that maybe someone is put in their position not by choice, but by circumstance. Things happen...

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      psycheskinnerposted 13 years agoin reply to this

      I  came to this country 5 years ago with a nil (bad) credit score and so had to build my own from scratch. That is why I know these companies make a profit by 1) charging interest and 2) loaning money to people who have a record or paying their bills and repaying their loans. I put all my bills on autopay, I started with loans for small items where companies will take more risk, I paid them back on time.   That is what you have to do--no short cuts. I also drove a $700 car for over a year in order to live within my means.

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   cr00059nposted 13 years ago

   Its the American Dream that lets many people with bad credit buy car financing.  Basically, such people will incur higher interest rates that will profit car makers and/or lenders.  If they later on admit there weakness of not being capable of paying, the car will be re-possessed and sold to second hand users at a much lower price.  Just think about all the Certified Pre-Owned Mercedes, Acura, and Lexus that are going to and from Dealership lots.  Its a game being played, even by rich corporations.

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10. 61

    McQueen3486posted 13 years ago

    Thank you, I appreciate the straightforward answer...not condescending sarcasm.

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    knolyourselfposted 13 years ago

    The current economic recession has been caused by bad credit. "282,4674 properties nationwide -- were in default last year". And the banks did the same thing. That's why they they got bailed for at least a trilion.

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12. 61

    McQueen3486posted 13 years ago

    Why can't we just be like some countries...and barter,lol. They seem to get along just fine. Some places, a Chicken is worth more than a car. They value the simple possessions. I wish it would be that simple now, but unfortunately, money and technology has made us one wealthy, but very stingy country.

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13. 84

    WriteAngledposted 13 years ago

    Presumably the requirement for a co-applicant is to give the loan company some assurance that it will get its money back if some else is willing to act as guarantor.
    
    There are the very initial steps of building credit when we get to adult life, when the credit rating is low simply because we haven't yet had the opportunity to show that we can be responsible about paying back loans.
    
    Any time after that, someone's credit rating is poor because they have been irresponsible about money they borrowed and spent.
    
    Responsible borrowers are burdened with higher interest rates to pay for the losses caused by irreponsible people. As far as I am concerned that is the real injustice, that I have to subsidise these wastrels. I personally think such people should not be allowed credit at all - full stop.
    
    I have lived some of my life in fairly difficult financial circumstances. I have been in a position where I could not afford to pay for medication, even at the subsidised prescription charges of the UK National Health Service. I went for years buying only the minimum of clothing for me and my daughters, and that (apart from school uniform) secondhand from charity shops. I waited till late in the day to buy food, so that I could buy stuff that had been reduced because it was at its sell-by date.
    
    I have worked and still work 60 hours, 100 hours or even more a week, sometimes all through the night, firstly to give my daughters a decent start in life, and now in order to fund the life I wish to live. 
    
    In all of this, I have never at any time had less than a 5-star credit rating, because my philosophy has always been that if I cannot afford something, I do not buy it. Yes, I have used and do use credit facilities, but I use them to help with major purchases, to tide me over an exceptional month or so of expenses, and to even out the peaks and troughs of freelance earnings.
    
    I do not see why I should subsidise people who borrow recklessly to pay for things they cannot afford. Much of this spending is on stuff they want to pose with like iphones and ipads, designer clothing and similar crap.
    
    It is possible to do without many things and still lead a fulfilling life.

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14. 61

    McQueen3486posted 13 years ago

    But not everyone who owes, owes because of a reckless life. Some things are out of their control.I once built myself up out of debt by a man who charged $25k in various items on my credits cards...and it wasn't necessarily my fault.
    
    Who says that people are spending on designer clothes,etc? I know people that do, but that's not particularly the case in this situation.

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15. 61

    McQueen3486posted 13 years ago

    I appreciate that you have done well by yourself, and have avoided credit cards...but technically, your advice isn't really of meaning..because you haven't been in this situation. And rubbing in everyone's faces that you've made the right decisions in life.

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16. 61

    McQueen3486posted 13 years ago

    I appreciate that you have done well by yourself, and have avoided credit cards...but technically, your advice isn't really of meaning..because you haven't been in this situation. And rubbing in everyone's faces that you've made the right decisions in life.

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       WriteAngledposted 13 years agoin reply to this

       I have not avoided credit cards. I have three of them with a total of about $30,000 credit available should I ever want it. I also have a personal loan repaid back at $400 per month which I used to buy my car, and mortgage payments for my house of $150 per month (low, because I ploughed a lot of spare cash and all my inheritance into paying off as much capital as I could from it). 
       
       I use credit cards for just about every purchase I make. I sometimes pay minimum repayment for several months at a time, while waiting for clients to pay me. However, I always know what the balances on my cards are approximately, and if necessary adjust my spending, even down to the food I eat, so as not to build up unmanageable debt.
       
       In 2006-2007, I used my main credit card to pay about $15,000 legal fees. It took me two years to pay that back, but while I was doing do, I did not buy luxuries.
       
       In November, I used a credit card to fulfil a dream and bought a harp for $4,500. However, I only did this because I know I have a regular savings account maturing in February which will cover this sum. I allowed myself those few months on credit, because the harp compensated for something dear to me that I decided I had to give up for various reasons including finance.
       
       I have been in situations of financial stress. I have not been in a bad credit situation, because I would rather starve and dress in rags than build up a debt I cannot afford.

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17. 60

    knolyourselfposted 13 years ago

    "And rubbing in everyone's faces that you've made the right decisions in life."
    I think you need some manners.

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18. 61

    McQueen3486posted 13 years ago

    No, I think I'm all good. You were the ones that started attacking me, because I asked a question. If you're going to talk to me like an idiot, then expect me to reply back.

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19. 60

    knolyourselfposted 13 years ago

    All a matter of interpretation.

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20. 65

    psycheskinnerposted 13 years ago

    Credit cards are actually a great way to build credit and reverse bad credit because pretty much anyone can get one, and it influences your score.  Of course that assumes you do pay down the balance most months.

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21. 61

    McQueen3486posted 13 years ago

    Truer words, never spoken.

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