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:
- The car doesn’t matter, you’re not buying a car, you’re buying an opportunity to re-establish your credit.
- I only have one car I can approve you for, but it’s a nice one!
- I know it’s not the car you want, just make payments for 6 months, come back, and you can trade it for a vehicle you want.
- You won’t be able to get approved for a car anywhere else. We got you approved on this car and you can drive it home today.
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.