How To Buy A Car With No Credit Or Bad Credit

“We’ll Pay Off Your Loan No Matter What You Owe”

These are common ads on the radio and newspaper all the time. They rely on your brain to trick you, as if the obligations of your current lease or loan just magically vanish. You can't just dump a lease or loan, it's a contract. By breaking the contract, penalties are stiff, in the thousands.

When a dealer offers this to you, they do get you out of your current lease or loan, but payoff penalties must be paid to your leasing company to end the contract. The dealer is not doing any favors at all for you; they just want your trade in so they can give you far below market value for it, while selling you a new car at a high profit. Then they resell your trade in for a high price, while you are stuck paying off the debt load of 2 cars.

With this scam, if you are upside down on your car loan and you still owe $10,000 for it, the dealer pays off your loan, and then you owe that $10,000 to the dealer. This gets financed along with the $15,000 car you are buying; now you are financing 2 cars for $25,000! Your payments are spread out over 60 or 72 months so you don't notice what just happened.

The more months they add to the loan, the lower the payments so you don't notice. In fact, it's possible that the payments could be less than your current loan, so you think you're saving money when you just got shafted!

Their ad made you think that trading in a car relieves you of your obligation to that car. It does not! This gets many, many, many people deeper into financial trouble. You are actually taking on double your current debt, when you thought you were dropping one debt for another and buying a new car. They misled you.

Sure they did get you out of the lease or loan and into a new car, but you are not really out of it. They dipped you out of it and then dipped you right back into it under their umbrella of debt.

If you are in a lease or a loan now, it's best to stay in it until the end. If you are upside down on a loan, now is not the time to trade in the car. You need to wait until the car is worth more than what you still owe on it. Try selling it privately.

By mixing a trade-in with a new car purchase, you will lose the maximum amount of money possible. Don't ever think you walked away ahead on a trade in. No one ever has. No one ever will. If you really need to get out of your lease, shift your strategy from terminating a lease early to a strategy of transferring your lease to another buyer via an auto lease trade.  You can find reputable companies online willing to do this.

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