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Financing we offer vs. in-house financing

What is in-house financing? The term refers to a vehicle loan where the dealer acts as the "in house" lender. While in-house financing has helped many Canadians get a vehicle, there are alternatives that can lead to a better credit score and, eventually, lower interest rates down the road.

Unlike indirect lending, where the auto dealer acts as an agent for the bank, in-house lending is direct lending, you are borrowing money from the dealer that you buy the vehicle from. It is a form of subprime lending that has been around for many years. In fact, in house lending was the first form of subprime auto lending. While this type of lending may have made sense when it first began, just like the Model T Ford, it has been replaced by programs that are much more advantageous to the customer.

Most of the advantages of in house lending lie in the fact that, for the most part, all you need to qualify for a loan is a down payment and a job. Most of the vehicles are lower-priced, and you make payments on a weekly basis. It's also easy to find an in-house dealer, most can be found on the main roads of larger towns. Due to the extremely high interest rates on in house loans, it makes it virtually impossible to ever get out of the loan. The loan doesn't go down as fast as the vehicle depreciates. So, you are stuck with it.

While the vehicles are affordable, they are usually older and have many kilometers on the odometer. Being older, they also have issues with upkeep and repair. The biggest issue, however, has to do with payment reporting, most of these smaller auto lots don't report your payment history to the credit bureaus.

Because of our experience, here at DJ Cruz's we know that the reason most bad credit customers can't get financed with a regular loan is because their credit score is too low. Buying a car from an in-house financier won't help them in the long run because, even if they make every payment on time, this positive credit history won't appear on their credit report. The credit bureaus won't have this information because the in-house dealer doesn't want to take the time to report it to the credit bureau. Without this new, positive credit history, the customer remains a bad credit car customer.

At DJ Cruz's, we have helped thousands of Canadians with bad credit drive a low-mileage quality used car using our fast approval loans program. We specialize in credit rebuilding. Our web site, www.cruzs.ca, enables you to search our entire inventory online. When you're ready, be sure to visit our online auto loan application, where you can begin the loan process in the comfort and security of your own home.