Just went through a mess trying to finance a used car. I haven’t borrowed money since 2012, no debt, no credit cards, just living within my means. When I applied for a loan, I was told I was refused. Not because of bad credit, but because I hadn’t used credit recently enough.
The dealership advertises “no applications refused,” but apparently if you don’t have an active debt history, you’re too much of a mystery for the system.
Co-signer? Not allowed. Using my own bank account for payments? Denied. Their solution? Open a joint account with my dad just to satisfy a bank’s paperwork, pay hundreds in fees over 6 years just to make it work.
The credit system says you can’t borrow money unless you’ve already been borrowing money, like somehow living within your means disqualifies you. It’s not about good credit, it’s about loyalty to the debt game. Screw you for standing on your own feet, I guess.
Just needed to get that off my chest. Anyone else run into this nonsense?
Banks are experts at providing loans. Car dealerships should be expert at selling cars. Asking the car dealer to be a bank is like trying to buy a telescope from a hat shop.
This is, a yes and no imo.
Cars are financed so much, and making the sale so often depends on being able to get the customer financed, that a lot of sales people do get pretty well versed in the financing side of things. I’ve finally after many years found a used car guy I trust, and shortly after I had done a consumer proposal (couple steps below a bankruptcy for anyone unfamiliar), the second time I was buying a car from him, he was able to get me a rate that I couldn’t BELIEVE, just by playing a couple banks against each other. He just wanted to make the sale, it’s no skin off him if I’m paying 5% or 25%, but he’s more likely to close the deal if he can get me a good rate and payments I like the size of.
Another angle is big companies that have their own financing wings. Mercedes-Benz Financial is a pretty good example. They’re entire purpose is just to help people buy their cars - so I’ve seen them offer rates as low as like 0.9%!
Don’t get me wrong, there are more scumbags than not out there, in car sales, used car sales, and loans - by FAR - but there are instances where things make sense and work out well.
On the main point though, yes, the entire credit system is a total scam. It was significantly worse ~20-30 years ago when they wouldn’t even tell you why you had good or bad credit - it was all just black magic they kept secret. Still a horrible scam to this day though.