Edmunds.com Helps Subprime Car Buyers Avoid High Interest Rates
SANTA MONICA, Calif. — February 23, 2012 — Car buyers with very poor credit are known by lending institutions as "subprime," and are often charged very high interest rates when they take out loans. Instead of taking out such loans, subprime car buyers are better off using the money they've set aside for a down payment to buy a solid inexpensive used car outright, advises Edmunds.com, the premier online resource for automotive information.
The advice is especially targeted to "deep subprime" buyers with credit scores below 550 and who are likely to turn to "Buy Here, Pay Here" lots that offer uncomfortably high interest rates. An estimated 57 percent of deep subprime buyers make their vehicle purchases from these dealerships which are generally easily identifiable because they only sell used cars and often advertise the tag line "No credit? No problem!"
"Consumers with poor credit think that 'Buy Here, Pay Here' may be their only option, but this move often signs them up for a seemingly endless cycle of high interest payments," says Edmunds.com Consumer Advice Associate Ronald Montoya. "By purchasing a car outright, deep subprime shoppers won't be beholden to the dealership or creditors. And since inexpensive used cars are much more dependable now than they were 20 years ago, they can be a long-term transportation solution instead of just a short-term fix."
Shoppers can find many of these low-end used vehicles at reputable dealerships across the country. Edmunds.com advises shoppers to review the tips found in its guide to buying a used car for under $2,500.
"In this price range, you are not going to get a recent model with all the frills," says Montoya. "What you will find are a number of high-mileage cars with a few dents and dings. But as long as the car runs well and has been properly maintained, you will likely be better off than if you bought a nicer car that requires expensive financing. "
An older used vehicle will also require more attention to maintenance, but without monthly payments to worry about, there will be more money on hand for fix-ups. Edmunds.com advises car owners on how to keep their cars running on the least amount of money possible at http://www.edmunds.com/car-care/broke-with-a-beater-how-to-maintain-an-old-car.html.
More information on avoiding "Buy Here, Pay Here" lots and purchasing an inexpensive vehicle can be found at http://www.edmunds.com/car-buying/how-to-buy-and-maintain-a-very-inexpensive-car.html.
Edmunds.com's used car inventory page has hundreds of used cars listed under $5,000 through its nationwide network of participating dealers. Users can search for these vehicles at http://www.edmunds.com/inventory/used/srp.html.
About Edmunds.com, Inc. (http://www.edmunds.com/help/about/index.html)
Edmunds.com, the premier online resource for automotive information, launched in 1995 as the first automotive information Web site. Its revered mobile site, Android App and five-star iPhone app makes car pricing and other research tools available for car shoppers at dealerships and on the go. Its automotive enthusiast Web site, InsideLine.com, is the most-read car publication of its kind. Its highly regarded mobile site and iPhone app features the wireless Web's most comprehensive gallery of automotive photos and videos. Edmunds.com Inc. is headquartered in Santa Monica, California, and maintains a satellite office in suburban Detroit. Follow Edmunds.com on Twitter@edmunds and fan Edmunds.com on Facebook at http://www.facebook.com/edmunds.