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Bad credit, non-prime, and sub-prime are all terms used to describe someone who has a lower credit score. Sub-prime refers to borrowers or loans that are offered at rates higher than the prime rate in order to cater to those with bad credit ratings. The reason behind this is due to the fact that sub-prime lending has a higher risk due to the lower credit rating of the borrower which can lead to further financial crises. In the auto market, we often see companies target those who want a vehicle but won’t be approved easily due to their low credit score.

The reality is, the majority of the market is comprised of real people, which means a huge percentage of the market has bad credit due to financial setbacks that affect credit scores. With many companies aware of how huge the sub-prime market is, unfortunately, many dealerships take advantage and provide customers with bad credit with higher interest rates, fees, commissions, and vehicle markups. This marketing strategy benefits the lenders and dealers more than the customer which is counterintuitive to those seeking something catered to bad credit.

What does this mean? Many people who have bad credit will have even worse credit after their auto loan. Dealerships often use rhetoric geared to approving any credit score regardless of how bad it is, because, in the end, they know the options for bad credit are fewer than those with good credit which means more people are willing to overpay just to get approved.

Often times, things that come with getting a vehicle with bad credit include fewer vehicle options and higher interest rates. Though high-interest rates are a given anywhere you shop for your vehicle with bad credit, vehicle options, and affordable vehicle prices shouldn’t be out of reach. With the sub-prime market taking up the majority of the auto industry, more companies are creating new ways to provide all customers regardless of their credit, with the same services and interest rates. That’s why at Palladino Lending Solutions, we help you get the best price on your vehicle while helping you rebuild your credit with our Return to Prime payment option.