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Website offers sub-prime car loans for buyers

May 17, 2012 12:00:00 AM PDT
It's not uncommon for some new car shoppers to go to a dealership hoping to buy a car, only to be disappointed because they couldn't qualify for the financing. Loss of employment or overextended credit can be some of the reasons your credit score isn't as good as it should be. But don't despair: There is a website that specializes in car financing for sub-prime borrowers.

Alhambra resident Steve Quach couldn't wait to show off his new car, a black convertible he has wanted for a long time.

"I was in the market for a new car," said Quach. "This was my dream car and I was able to make it happen."

But getting the car almost didn't happen. Quach's credit isn't as good as it should be and the banks didn't want to lend him the money.

"Through local banks and things like that. Sometimes just not having the perfect credit score is a challenge," said Quach.

It was a challenge, until Steve found out about an online lender that specifically lends money to car buyers with less than prime credit. That website is simply called CarFinance.com.

"We want the customer to win in the transaction, and obviously if they don't win, then we don't either," said Jim Landy, president and CEO of Car Finance Capital. "So in terms of FICO scores, we're basically looking at where the banks leave off, which is 700, and we go all the way down to 525."

Landy says everything is done online from start to finish. But not everyone will qualify for a car loan with them, and those that do pay a higher interest rate than someone with great credit.

"We start from the high single digits and we'll go into the mid-teens from a rate," said Landy. "The other thing that can influence the rate is how much down payment the consumer is making. The more down, the lower the rate."

In the past I have always recommended car buyers get their financing lined up before they go to the dealership, no matter what your credit history is. That's because first, you'll know exactly whether you can get financing or not and how much you can afford to spend.

Second, it will speed up the process of purchasing the car since you won't have to fill out all of the paperwork there.

Third, most manufacturers offer special financing or a rebate, but usually not both. With your financing in hand you can then concentrate on the rebate.

Last and most important, you are now a cash buyer and can usually make a better deal since you're only talking about price.

"If you already have the financing in hand, you walk in as a cash buyer, you're really focusing on the car, and the whole conversation is about the car, not the financing," said Landy.

And for some buyers, like Steve Quach, it may be the only choice.

"I couldn't tell you how they were able to do it, but I am just glad they were," said Quach.

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