‘Money: It's Personal' — No credit check auto loans
SAN ANTONIO – Have you ever seen signs on auto dealerships that say "no credit check" or "buy here, pay here"?
Signs like that can be temping if your credit is less than stellar or if you have a limited credit history.
But the Consumer Financial Protection Bureau said these types of in-house auto loans can have much higher interest than the ones offered at banks, credit unions or through other lenders.
The CFPB said financial institutions will usually limit the amount they lend to a customer to purchase a vehicle based on the vehicle's value.
If a dealer is able to act as its own bank, it may not set the same types of limits, so consumers may end up paying thousands more than the value of a vehicle.
The CFPB said there is bigger risk that a consumer will borrow more than a vehicle is worth if they borrow using an in-house auto loan.
Not all hope is lost for those with poor or limited credit histories. There are some lenders that may be willing to finance your vehicle purchase, so it's best to know all your options before you start negotiating to get a better deal.
For tips from the Consumer Financial Protection Bureau, click here.
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