Am I Approved?
Car dealers will advertise “Guaranteed Credit Approval” targeting a specific group of car shoppers with bad credit or no credit at all. These people have most likely been denied an auto loan from one or more dealerships previously while attempting to finance a car.
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This dealer advertising scam is very similar to the all credit applications approved scam. It’s used in dealers advertising to drive high volumes of bad to poor credit customers to a dealership in the hopes of being approved to finance a vehicle.
The customers that fall for this type of scam have been turned down by other dealers when trying to buy a car. They see or hear the ad claiming “guaranteed credit approval” and believe the dealer can get them approved to finance a vehicle.
The goal of the guaranteed credit approval scam is to get a high volume of bad credit customers to the dealership and then weed out the people that can actually buy a car. People with extremely bad credit and no hope of financing a car will normally be offered a specific or undesirable vehicle and/or an unrealistic deal. The terms of the deal may require a very large down payment, high interest rate, short-term, expensive monthly payments, or a combination of all. If the buyer doesn’t agree to the deal, they’ll be sent on their way.
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Since this statement can be so misleading to consumers, dealers are not allowed to legally advertise the term “guaranteed credit approval” in some states.
There is a handful of lenders out there that will approve just about anyone no matter how bad their credit history is. These lenders base their loan decision on “risk” more than actual payment history. Very high interests rates, large amounts of cash down, poor quality high mileage vehicles, and very short loan terms accompany these types of auto loan approvals.
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In some states, it’s legal to advertise Guaranteed Credit Approval. These dealerships will blanket advertise they can get anyone approved. These dealers have a partnership with a lender that will approve just about anyone no matter how bad their credit is.
The process at one of these guaranteed approval dealerships is they determine you have bad credit, they’ll want to get all of your information upfront before showing you any vehicles.
Once they get all your information, they will put it into their system. The software program will then look at how “risky” you are as a borrower. The system will also match you up with the vehicles on the dealer’s lot that will make them the most money.
The salesman will come back out and present the numbers to you. Some dealerships have a nice printout that says “YOU’RE APPROVED” across the top of it to play on your emotions.
The car salesman may present the numbers to you by saying something like this:
Congratulations, you’re approved with only $2000 down at $385 a month for only 48 months on this 2010 Chevy Trailblazer. Sign right here and I’ll get the paperwork started.
Approvals from these types of companies usually require very large down payments and they limit you to only one or two high-profit vehicles. The vehicles a dealer acquires for these types of programs are normally of poor quality and have high mileage.
There are many avenues a dealer can take when attempting to sell you a specific car you really don’t want to buy, here are a few examples:
Don’t let the dealer talk you into something you don’t want to buy or you can’t afford. Take someone with you to the dealership for support. If you don’t like the deal, don’t do it!
Before contacting a guaranteed credit approval dealership get pre-approved with your local bank, credit union, or for the best interest rates apply for a bad credit car loan with an online lender.
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Recommended bad credit auto loan companies
You can take the information you receive from the companies below and make a decision on whether or not you really need to buy a car at this time. If you decide you need to keep your current car for a little while longer, take the time to clean up your credit history and save up a large down payment. You’ll be surprised how much you can accomplish in just a few short months.
You’re in desperate need of a new car. You’ve been to a few dealerships and up to this point they’ve all told you the same thing, “your credit history is not good enough to finance a car.”
Sitting in front of the television you see this loud colorful advertisement offering guaranteed credit approval. You decide to take a chance and go to the dealership. Once you arrive you see signs and banners everywhere that say guaranteed credit approval. You think to yourself, this can’t be a scam.
The dealership is packed with people trying to buy cars. The car salesman has you fill out a credit application and then runs off to check your credit. He returns shortly and tells you there is no way you can be approved for a car loan with your bad credit history.
Now that you feel like they’ve lied to you, you decide to call the dealer out on their deception. You state, “your ad says credit approval guaranteed! I suggest you get me approved or I’m going to file a complaint.”
The salesman may excuse himself for a minute to speak with his manager. He will return shortly after and let you know they made a mistake, apologize, and explain to you that you are approved for a car loan. Of course, the approval you’re going to hear from the salesman is going to be outrageous.
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Car dealers can make up anything to “broom” you out the door. It’s not right, but that’s how the game is played. The salesman may not say those exact words above, but you get the point. I’ve heard finance managers tell customers they’re approved to pay cash for the car.
Truth is, about 1 out of 500 people might bring up the guaranteed credit approval banners hanging in the showroom once they’ve been turned down for a car loan. Most people just want to get out of the dealership as quick as possible. Dealer’s know this and will continue to keep using this technique over and over again.
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