New Law Requires Auto Dealers to Share Credit History
New Law Requires Auto Dealers to Share Credit History
A new law has been passed by the United States District judge this week and this requires automobile dealers to share their bad credit history report to their clients. This gesture ensures the protection of costumers from automobile lenders’ high interest rates.
It is now mandatory for car dealers to supply transparency to their customers about their current financial standing even if it involves a third-party lender. District Judge Ellen Huvelle has required these companies to follow this new regulation to give caution to clients for the possibility that their automobile dealers might be unfairly charging them with high interest rates because of past credit status.
After the long altercation between the National Automobile Dealers Association, also known as the NADA and the Federal Trade Commission or the FTC, Judge Huvelle came with the decision to require car dealers to inform their buyers that they have had bad credit history.
Before the new law was passed, there already is a current law that required the dealers to inform their customers about their increase in the interest rate if it is caused by bad credit history. However, according to the NADA, a loan coming from a third-party persona like a financial institution was an exception to this law.
The FTC said that dealers were supposed to be obligated to share this crucial information with their clients and the Judge agreed. Getting an auto loan with bad credit is a very difficult task to accomplish, and customers are even bombarded with higher interest rates.
But it does not always have to be this way. There are ways for you not to be caught in a very high debt when you try to get a car. They include getting away with dealership finance.
One way is to turn to credit unions, though they may be strict in giving you a full credit history check, their automobile loans are very much cheaper than those offered by dealers.
Another way is to do face to face lending. This type of lending will allow you to find people who would be willing to lend you loans that have rates lower than auto dealers.
One last tip is to check your home equity loan. This will not only ensure you of a low interest rate it may even help you in your tax rate. However, if you are careless and you are not able to pay back the loan you do not only get your car repossessed, you also lose your house.
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Filed under: auto loans • car loan • Personal Finance • personal loans
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