If our credit is bad or poor then we want to charge high interest rates. Before taking any loan you need to know some information about car loans in a particular area . This will help you avoid being guided by the dealer when making your final decision.
http://www.mycarloanonline.com/car-loans-hamilton

Good post. If possible, buy the $3500 car, because even a "moderate" rate of 14% is still very expensive due to the fact it's an amortized loan, and most of the payments go toward interest.

While i can certainly understand the need or want for a new or newer car by people with less than perfect credit, BUT i have trouble understanding how people will sign up for 29% interest loans.

The point here is if people stopped accepting 29% interest loans then the lenders would stop doing it.

Lets face it, credit companies are in business to make money, so if you have bad credit your a higher risk. So yes they are entitle to more profit for the risk, but lets all be reasonable.

If people with bad credit stop accepting interest rates at over triple the standard car loan rates then these companies will have to offer lower rates .

Watch what would happen if when your taken in to the Credit Managers office and told congradulations you got your loan, but sadly with your bad credit you will have to pay 29% interest and you then shake your head and inform them you will accept nothing more than 18% and walk out without signing.

I can bet within a very short time, those credit managers will be pulling their hair out and pressuring the credit lenders.

Plus remember while credit managers and car sales people talk a big game, they only make money if they get you to sign on the dotted line.

They are NOT in control, you are.

Does it work? Well here are a few examples. Tom was pulled into a small office and told the wonderful news, he could get his new truck, sadly the interest would be 27,1 % and he would need to come up with 3500 down.

Tom smiles, and informed the sale person that if he has to come up with 3500 down, which he could just manage, he would just go out and buy a used vehicle and work on his credit, no way he was paying 27.1% interest and no way he was putting down 3500 after the salesperson promised him he would have to put no more than 250 down.

Surprise, that afternoon, the very same sales person calls back and found him a loan at 14% and nothing down.

Lesion one, car dealers often get commissions on loans from lenders, so do not really shop around for a good deal for you. They work for the dealership, not to get you the best deal.

Threatened with loosing a sale, the dealer decided he needed the sale more than the commission on the loan.

Robert and his wife, walked into a dealership, one of three, looked around, spent time with a sales person, and decide on a vehicle. They make an offer and inform the deal they have 1000 to put down, they will accept no more than 16% interest and not to bother calling back unless these conditions are met.

Of course all three dealers do call back, as they explain excuses they find they are quickly hung up on. The second dealer they visited though does call back and tell them they have what they want.

Of course it is the old bait and switch. when there they find it is not hte car they wanted but another, their car was sold sadly then told sadly interest rate will be 29%. As the sale person continues... they both walked out, no words, just leave.

A week later, dealer one calls again and offers the loan they want at the interest rate they wanted. The original car they looked at, had indeed been sold but they could come look at similar cars.

They did and found a suitable car and did the deal.

Lesion two, Car dealers need sales. Clearly after a week, someone at the dealership put pressure on the sale people to get some sales. Thus they reviewed prospects and found a loan for Robert and his wife.

Fact is when you go in to buy a used car, your in control. Don't give that control away to the dealership. if they make promises and don't deliver, don't sign. If they try to add in extras just as your about to sign the deal, walk away.

If they inform you that your required to purchase certain things by the lender, request the name of the contact at the lender, call them and demand to see where these items are required, Chances are the lender will have no idea what your talking about.