Nashville may be one of the best places where borrowers can find great bad credit auto loan offers. However, it is not exempted from the rampancy of bad credit car loan Nashville scams which are usually pulled off by car dealers. Here are some examples.
First is the spot delivery or “financing fell through” scam. It happens when a car dealer gives a low interest rate to a bad credit borrower. The dealer would allow the borrower to drive the car home after letting him or her sign some papers. However, after a couple of weeks or so, the dealer would contact the borrower to say that he or she was not approved for a car loan with a low interest rate or the “financing fell through.” The dealer would ask the borrower to visit the dealer’s office again and renegotiate the deal. The borrower ends up signing a contract at a high interest rate that he or she actually deserves. What happened behind the scenes? The car dealer knew from the start that the borrower has a bad credit and that he or she would not really qualify for a favorable rate. The papers do not also constitute the contract because they contain the “subject to financing” clause which means that signing it would not finalize anything.
Another example of a common bad credit car loan Nashville scam is the credit score lie. If a borrower let the car dealer pull out his or her credit report for him or her, he or she is giving the car dealer an opportunity to pull off a trick. Even if the borrower has a good credit or a not so low credit score, an abusive car dealer would lie about the credit score and declare a much lower one. He or she would suggest that the borrower could only qualify for a high interest rate. If the borrower agrees, he or she will keep on making payments for the loan at a high interest rate that he or she does not really deserve. Thus, it is really important for bad credit borrowers to get a hold of their credit reports before approaching a lender or a car dealer.
The last example is the straw purchase or co-signer scam which happens this way: A bad credit borrower walks into the dealership’s office with his or her co-signer, who apparently has a good credit, and sign the loan contract. After some days or weeks, the bad credit borrower would find out that the loan is not in his or her name but on the co-signer’s name, who is now technically the primary borrower. How did this happen? The borrower and the co-signer has most probably signed the contract separately, which could be deliberately done by the car dealer. Borrowers and co-signers should always sign the contract together to avoid this scam.
To avoid these bad credit car loan Nashville frauds, bad credit borrowers should never forget to get their credit reports beforehand and read the contract carefully before signing it.