Auto
loans for bad credit consumers
Auto loans for bad credit consumers
By Peter Bonavista
Private party auto loans across the United States
are applied for and approved in dealerships an in banks. The dealerships
moved in to the finance market many many years ago. They realized
that they could sometimes make more money from the financing on
private party auto loans than the actual profit on the car or
truck. Quite a revelation for them. This catapulted their profit
margin to heights they had never experienced. Hence the big finance
offers they spew across the TV, newspapers, radios and billboards
of America. During the 1950's it was not the case.
In
the past as far back as the 1950's you would go see your local
new or used car dealer. Pick out a car with him (yep...it would
have been a him) and then proceed to the bank for a private party
auto loan. It would in fact be called "a loan". The
idea of creating title tags for every loan was not common practice
back then. The bank manager or loan's officer would make a deal
for interest payments and length of term, bring it all down to
a hand shake and a stroke of the pen. They would make a note in
their ledger for the principal owing on your "private party
auto loan".
As
time evolved and competition grew for private party loans the
banks soon realized that the profit in personal finance was under
rated. The population of the United States was exploding as the
baby boom kicked in to full swing. More family's needed vehicles
than ever before. The automobile manufacturers were pumping a
massive amount of cars on to the market and it all snow balled
from there. The "new age" dealerships of the 1970's
began offering their own financing. They basically offered funds
to people with all kinds of credit ratings. They took bigger risks
than the banks on private party auto loans but they charged
larger interest. Cha-Ching! So the moral of this story is "Get
your financing at the bank before you go to the dealership"
Peter Bonavista is a successful author and publisher of http://www.auto-loan-4u.com.
He lives with his wife Twyla in Newyork, New York.
