As a result of the economic meltdown, car manufacturers saw their sales decline sharply. Several even went into bankruptcy including General Motors the largest of the car makers. Now in order to rebuild their businesses they have aggressively gone after all potential buyers with attractive financing. Car financing rates are now very attractive. This includes all types of loans such as poor credit car loans, no credit car loans, guaranteed auto loans and used auto loans.
Let’s take a quick look at each of these loans to see which may best fit your specific situation. Poor credit auto loans are for those who have a credit score in the low 600’s and down into the low 500 range. Below that level its bad credit. While both are often referred to as poor or bad credit, there is a difference in the rate of interest that applies. Poor credit car loans have a lower interest rate compared to those that are considered bad credit.
No credit auto loans are for those who have not had time or the opportunity to establish a credit record. One would generally think that the result would be low interest rate but unfortunately the opposite is the case. Without a verifiable credit score, the interest rate tends to be high. The same is true for guaranteed auto loans which generally refer to a loan based on you being able to prove you have employment and a steady income. The loan is made on the basis of your employment. Again this is a high rate. In both cases the rates can be reduced if you can make a down payment or provide a credit worthy cosigner.
Used auto loans run the full spectrum in rates depending on your credit. If you have good or excellent credit, the rate can be very close to new car rates but if you have poor or bad credit the rates can escalate rapidly. Before you shop for your next car, understand your situation and do what you can to get the best rate possible. The internet is a great place to start.
