Online Auto Loan Company Not Always a Bargain
Jun 4th, 2008 by shop-universal-best-buy
Online Auto Loan Company Not Always a Bargain
Getting a car loan from an online auto loan company is not always a
bargain. There are definite pros and cons about going with an online auto
loan company to obtain financing for a car purchase. While the
convenience of being able to shop for a car loan in your pajamas might be a
real positive, the cons may have you getting dressed and heading out to
your local bank or finance company.
As mentioned above, one of the advantages of shopping for car financing
at an online auto loan company is being able to do it at your
convenience. No matter the time of day or your attire, you can fill out
applications whenever you feel like it. Also, the results are usually received
quickly, and they often offer lower interest rates because there are
many finance companies vying for your business.
On the negative side is the fact that there is no face-to-face
relationship like you might have if dealing with your local bank. Also, despite
the fact that you might be pre-approved immediately, receiving the
actual approval and funding can often take days or even weeks. Then when
the loan in finally approved, you might be required to pay extra for
overnight shipping of the loan check.
Another huge disadvantage to obtaining financing from an online source,
is that you don’t always know how legitimate or reliable the company
really is. Additionally, when there’s a problem, customer service can
be poor or even non-existent.
For some people the advantages far outweigh the disadvantages. For
them, the promise of a lower interest rate combined with the convenience
makes going with an online auto loan company the best choice.
Below is the personal testimony of someone who discovered first hand
both the pros and cons of going with an internet car financing.
“Approximately, 10 months ago I tried getting financed from an online
auto finance company. This company had everything I was looking for, and
saved the headache of actually going to the bank or dealing with
obnoxious car salesmen.
The form was 3 pages long, was easy to read and understand and I
couldn’t believe it was just that simple. With a few clicks of filling out
the online application, I received the confirmation page and an email
detailing that my application was on its way to a lender they worked with.
They guaranteed financing no matter what my credit was. Being that I
had a fairly good score, I had no worries going into this process.
However, within the next few days, I began to notice a large number of
inquiries on my credit report. All of these inquiries had declined me
financing, which reflected negatively on my credit report.
By the end of the week I had a total of 20 inquiries and only one bank
had approved me for financing. That bank offered such an absurdly high
interest rate, that naturally I decided NOT to take advantage of that
financing option.
I would not recommend going to an online car loan company unless you
realize that once they have your information, they are free to distribute
it to whomever they choose, even if they say they won’t. Carefully and
thoroughly do your research and check the reputation of the company
you have in mind. Otherwise you will end up like me with a large number
of credit checks declining you for credit and no car in the end.”
Probably the biggest problem about going with an unknown online auto
loan company is the fact that you have given them permission to run
credit checks. An unscrupulous company will shop around your application
resulting in a lot of fruitless hits to your credit report.
The second problem is that the bank that finally did approve the loan,
only did so at a high interest rate. It didn’t matter that the
applicant had a decent credit rating, the “low interest rate” advertised by the
online car loan company was not what was offered by the actual lending
institution.
The online auto loan company is not always a bargain, and is definitely
a “buyer beware” proposition.
Online Auto Loan Company Not Always a Bargain / Author: C.L. Hendricks
Occupation: website manager and content writer
C.L. Hendricks has been a Jill-of-all-trades and become an expert in some. She writes for http://www.invitingsmiles.com, http://www.survival-homestead.com, and http://www.car-accident-advice.com, as well as several other websites on a variety of topics.
http://www.survival-homestead.com
