Car Dealer Ads “ Let us help you with your credit”
My name is Wayne Sanford, I am the owner of New Start Financial Corporation and have been in the credit industry now for over 11 years going on 12 years soon.
I have analyzed over 16,000 credit reports and a large majority of them are for people trying to purchase or refinance their homes.
Prior to the meltdown one of my companies was approved by Dealer-track who provides the software platform for most large dealerships across the country, for the average consumer think of it like after you deal with the sales person and sales manager then go “in the back” to fill out the paperwork with the finance manager and get all the “extra coverage” presented to you to buy.
Now there is NOTHING wrong with that for both parties, the dealership makes more money and the consumer gets more valuable coverage if they want it to protect them from financial unforeseen incidents.
What I get a REAL kick out of is the advertisements some of them use to make it look like they are doing you a favor by saying they can help you with your credit and they created a separate division to help consumers with challenged credit or credit “with a few bumps on It”.
As with most advertisements if there is even a sliver of truth to it then advertising people literally make a molehill into a mountain.
What pops in my head is an old TV advertisements from some bank about use our bank not the others as we don’t change a fee for you to talk to the bank tellers as well as some other ridiculously made up fees.
While most of it was an outright lie, they made you think are you getting charged those types of fees and don’t know it? Answer—you’re not but their point was they don’t charge some fees that others do.
So let’s explore that same concept with car dealerships and other types in the same way, my personal opinion if they have to lie to you to get you in the door that’s strike one in my book, but it’s done all across the industry so for the small percentage of educated that read this let’s put a little more knowledge into your Christmas/holiday stocking.
REALITY Check # 1:
- ALL dealerships have 95% of the same lenders.
Bank lenders have sales representatives whose job is to go to dealerships and say use our bank to sell your product, we will give you great rates and help you make more money and sell more cars.
The job of this sales representative for the bank is not to have them in one dealership but as many dealerships as possible. That does make sense, doesn’t it?
Car Loans are Securitized:
There are what are called in the industry “Bottom feeder” lenders, these are lenders that are willing to loan money for a car at a 480 credit score, if they are willing to put several thousand down for a down payment and charged them the state maximum of 24% interest.
I would almost call this a temporary loan as how long can the customer keep up a payment that is obviously crazy as just like with mortgages majority of the interest gets paid first before the principle ( approx. 70% of pmt is interest ).
So a $20,000 at 24% interest costs the customer $14,560 in interest and is approx. $575 a month. This does not count the few thousand that was given for a down payment.
At 10% interest? Payment is $425.00
The car lender will then repossess the car and sell it at auction and place a collection and possible lawsuit against the client and since very little was paid on due to all the interest paid in the beginning of the loan. Sounds like a good business but I personally don’t know how those people sleep at night ( the lenders not the dealerships).
Our Department/Program will help your credit:
If you know my blogs you know I have a tendency to deviate when I get a thought in my mind I feel you need to know (think of it as backstory).
ANY TIME an account goes on your credit and you make on time payments it will help your credit, that’s not rocket science. And don’t be deceived into thinking it is going to increase your credit score by 100 points.
And while I always say your credit report is like a thumbprint and everything is report specific so your credit score will increase but if it increases 5 points then all the advertisements about helping your credit they mentioned to you to get you in the doors was not a lie.
Credit repair is a service but it is also a bit of a skill as one would need to know all the inner workings of it and how lenders view that report and score. If a credit expert does not know this then how can they truly help the client and if you are the client are you not paying for that expert advice? Too help you navigate thru a system that media (paid by banks and credit bureaus) that makes it seem like all you have to do is click a button and things will be “fixed”.
If you think that then wow is all I can say, I recently was contacted by a client you found me on the internet and read some very nice reviews on me which I thought was nice but was screwed over by a company in the past and wasn’t sure about doing it again, she said her husband got a lot of negative information removed from her credit but she was still declined for a loan.
So I said to her well it’s like going to a dentist, if you don’t check out the dentist first and they are not good, whose fault was that for not checking them out and are you now going to stop going to the dentist?
I told her you need someone who specializes in mortgage credit to help you get into your home and obviously just deleting some negative information didn’t do the job so a decision needs to be made and I will not “sell you” on me, my credentials speak for themselves, if you want me to help I will be here for you now or a year from now if you decide to make that choice.
I do not push people into a decision as I believe we are all adults and can make their own decision without undue influence.
* Want to learn more about how the credit system works?
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