Seattle car loans | bad credit auto loan Seattle Washington WA

Getting a car loan in Seattle is presenting an opportunity for unscrupulous dealers to take advantage of people who are susceptible to arguments of bad credit. And, car buying can be especially problematic for those who do not understand how car buying works, and for those who do not understand their rights under the Washington Consumer Loan Act.

Getting a car loan in Seattle under Consumer Loan Act protection

What many Washingtonians do not understand is that there are laws in place in Washington state that are designed to protect consumers. Looking for dealers that have obtained a special license under the act is a good idea. These are dealers who pay a special fee to be recognized as such, and as licensees agree to several terms that make for fairer lending practices. Some of these requirements include:

Limiting the interest rate to no more than 25% APR
Requiring the lender to disclose the entire pay-off amount of the loan
Requiring the lender to let the borrower know the annual percentage rate on the loan
Forbidding blank spaces on any loan document or contract that the borrower signs Disclosure of any prepayment penalties

Watching out for the unscrupulous

While the above conditions sound nice, the fact of the matter is that there are plenty of car dealers in Seattle that do not comply with the Usury Act, preventing excessive interest charges. Many people who have low financial literacy find that getting a car loan in Seattle from a dealer can result in interest rates as high as 29 percent or higher (even though the rate is currently a little over eight percent in Seattle), and some car dealerships do not disclose the entire payoff amount. Hispanics are especially susceptible, as they are usually not as familiar with the system of credit in the U.S., and they are trusting of people that speak Spanish when they enter a car dealership. Indeed, some dealers are targeting Hispanics for car buying scams that allow them to pocket the difference in interest, or sell loans to other companies for hefty commissions.

When getting a car loan in Seattle, it is important to look for lenders that are licensed under the Consumer Loan Act, and it is important to understand what practices are considered illegal. That way you can avoid getting scammed, and if you do find yourself a victim, you know that you have the right to complain.

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