“In house dealer financing.” First, let’s make sure we are talking about the same thing. In house car financing just means that the car dealer takes the place of the lender to provide a loan for car buyers.
Car buyers with poor credit deciding to purchase a new vehicle can finance from in house financing car dealers directly. You pay for the car directly to the car dealer. This type of in house financing is also called Tote-The-Note, Buy-here-Pay-Here, In-House dealer financing and many other catchy phrases. The in house financing car dealers will carry the loan until it is paid off or refinanced. In most cases, the loan history will not be reported to any credit agency.
In-house lenders exist for two reasons. Simply put, dealers need to sell the less desirable cars that people trade in, and many people are shopping for cars that get turned down by lenders because of bad credit scores. Unlike traditional car loans, in house financing car dealer’s auto loans are usually structured for weekly or bi-weekly payments, depending on how often the borrower gets paid. Their ability to get credit is based on their job.
In house financing for customers
With in house auto financing or “guaranteed auto financing,” there’s no reliance on the major credit reporting bureaus. Car buyers who are looking for seller financing only need proof of income and steady residency to qualify. Traditional lenders refuse loans because the applicant is not credit-worthy based on the credit reporting agencies. In house financing, dealers are car dealerships that finance anyone regardless of your credit.
Car Dealerships That Finance Anyone
In house financing dealerships offer guaranteed loans and are a type of special financing tote-the-note loans. They require pay stubs or proof of income for at least two years of continuous employment, professional references, down payment of at least 10 percent. Many dealerships that approve bad credit loans will require a larger down payment than average to cover the risk of the investment.
In House Financing Car Dealers Sell The Less Valuable Cars
In-house dealer financing options hit a growth spurt in the wake of the economic downturn. In house financing car, dealers exist for two reasons. There was an increased need to find a way to secure car loans for people with damaged credit, often through no fault of their own, due to job loss, illness or divorce. Working people with bad credit found themselves asking the question, “How can I get back and forth to work if I do not have a car.” This also created an avenue for dealers to sell the less desirable cars that they have taken in trade. These cars are sold to buyers that because of their credit history, don’t have the ability to secure a loan for a better quality car. Don’t be misled by what appears to be a good price and think you are getting a great deal with dealer to customer financing.