Guaranteed car finance loans are often offered to people with poor credit or with no credit score, like first time buyers. It doesn’t have to be that way, there’s no rule about it, but sometimes folks who have had credit problems in financing a car want to make sure they have a guaranteed car loan before they start car shopping at the auto dealership.

There are many traditional lenders will scrutinize every detail of a potential borrower’s credit history before even talking about it. Kind of like, “The loan is disapproved for now, but please reapply in a month for final disapproval.”

That’s the way it used to be anyway.  But the truth is, the lenders are in the business of issuing loans. In a down economy, like we have right now, many people are experiencing credit challenges and the lenders must become less strict in their lending requirements in order to continue business.

A bad credit auto loan to finance a car may not have the same interest rate as a car loan on great credit, but lenders and dealerships have had to become more competitive because the number of individuals with “perfect credit” is dropping year after year. A guaranteed car loan that you get from an online lender can help you avoid the potential face-to-face humiliation of getting turned down from a regular bank.

In actuality, it is not just the lenders who are having to compete for business these days in the tight economy. The car dealerships business is very competitive. And it is often more important to sell a car for the dealer than it is to make a huge profit on that individual car.

Car manufacturers, like Ford, Chevy and Toyota pay dealers extra incentives based on the number of vehicles they sell, not what they sell them for. That means that the more cars sold, the larger the incentives and the paydays for the dealership become.

Some dealers are willing to sell the car at cost, or even below cost, which makes financing a car much easier.

Even if you have really bad credit, when it comes to finding a car loan to finance a new or used car, the internet has it all over the traditional lenders. It’s easy to apply online for a loan, and it’s really fast. Sometimes you can even get your guaranteed car finance approval in 3 minutes or less. And then it’s off to the dealer to get the automobile you really want.