Finance Questions

Question: Are there any VALID auto financing companies that will finance a car less that $7500??

Why do they refuse to finance cars lower than $7500?
To me, it seems that this would help lower income people establish good credit on a lower priced vehicle

Answer: The main reasons they dont are...

1. The reliability factor of the Vehicle. Alot of cars (not all) are high milage older vehicles meaning that there is a higher likelyhood of the car breaking down. Heres the delima for the consumer,if the car breaks down,can you afford to fix it and still make the payments. Alot of times the answer is no thus the car gets repo'd. Once the car is repo'd it goes to auction and 9 times out of 10 the bank does not recoup its entire loss(the amount of money they gave you to finance the car.

2. Money- on a $7500 loan the bank is not going to make enough money back on the loan for a decent profit,thus they feel its not worth the time or the risk.
Here's an example...the car is $7500,now with tax and license fees (depending where you live,that brings the car to $8250. Financing $8250 for 5 yrs at a 9.9% interest rate makes your payments $174.88. Multiply 60 mos. of payments times $174.88 and your total number of payments will equal $10,440
Subtract $8250 from $10,440 and the bank only makes $2190 in profit,providing you dont pay of the car early.

Buy Here Pay Here Car Lots - We Finance Car Dealers