Recent research from Experian Automotive reveals that individuals using bad credit auto financing must take extra precautions when purchasing a used car. Consumer Reports announced that up to 47 percent of the value of a new car is lost within the first three years of ownership. This makes used cars a more affordable choice for many people with bad credit but these vehicles may include more risk.
With a used car, there is a chance that the history is different than the seller states. The title may only be clean because the previous branded title has been washed. In this case, the used car buyer may sign a branded title without even realizing it. Experian Automotive found that vehicle history could have a major effect on car financing.
In the study it conducted, Experian Automotive discovered that over two percent of year 2005 and newer vehicles had a negative event in their history that could significantly affect the value of the automobile.
The negative events noted included salvage, frame damage, and odometer rollback. While they occur across each credit segment, over three percent of non-prime financing was characterized by negative vehicle history.
Experian Automotive also noted that vehicles with a brand type negative event were more likely to be charged off by lenders. To keep themselves out of this situation, car buyers should finance a vehicle that will be affordable to maintain. Even a reliable car with a branded title could cost more come trade-in time.
To prevent themselves from purchasing a car with a blemished history, car buyers should visit the National Insurance Crime Bureau Web site and use VINCheck to inspect the history. A vehicle history report from AutoCheck or Carfax is also recommended. If both reports come back clean, car buyers should have an ASE Certified Master Mechanic inspect the vehicle.
