Apply for a Bad Credit Car Loan Before You Start Shopping for a Vehicle

Get Car Financing
Even with poor credit.

By

Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


, Contributing Writer - March 14, 2018

Car buyers with bad credit need to focus on getting approved for an auto loan before they begin shopping for a vehicle to finance.

Getting an Auto Loan with Bad Credit

Borrowers with good credit often start the process of buying a car by looking at specific vehicles they're interested in. After finding a car they like, they can approach a lender to get pre-approved before heading to a dealership, or they can go to the dealership that has the vehicle they want to get financed.

Bad credit car buyers don’t have this luxury.

The lenders who finance subprime auto loans set the terms of the loan based on an applicant's situation, which restricts vehicle selection. Instead of targeting specific vehicles, car buyers with imperfect credit are better off getting their financing arranged first.

Because subprime lenders only work indirectly through certain dealerships, this process begins by finding a dealer that can help – something that CarsDirect specializes in. A credit-challenged buyer should apply with the dealership, who'll then try to get them approved with their subprime lenders.

After a subprime lender approves an applicant, they'll set the terms of the car loan based on what tier or program the borrower qualifies for. The lender sets a maximum loan amount and monthly payment during this process, and the buyer can choose from the cars in the dealer's inventory that fit the loan structure.

Subprime lenders also have overall vehicle restrictions they stick to. Typically, they won't finance cars that are older than 10 years or have more than 100,000 miles on them, or loans of less than $5,000. Subprime lenders also require clean vehicle titles.

Staying Practical with Your Vehicle Choice

When it comes to subprime auto loans, vehicle choice revolves around the dealership's inventory and the lender's guidelines. Car buyers with poor credit only set themselves up for disappointment by trying to choose a vehicle before they get approved.

Instead of pointing to a particular car, color, or make, it's more practical for bad credit car buyers to focus on what's absolutely needed in a vehicle. It's also a good idea to choose something affordable due to the higher interest rates these loans feature.

With a practical vehicle choice, borrowers can focus on making all their payments on time so they can improve their credit. That way, the next time they're in the market for a car, they won't need subprime financing.

Helping You Along The Way

When you need a bad credit car loan, vehicle choice comes at the end – once you've been approved. For that to happen, you need to find a dealership that can work with you, and CarsDirect can help.

We work with a nationwide network of special finance dealerships that use the lenders that can get you financed. Start the process by submitting the free and secure car loan request form on our website, and we'll work to set you up with a local dealer that's ready to help.

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, Contributing Writer

David Topham covers the automotive and auto finance industries as the Content Manager of Auto Credit Express who also contributes to CarsDirect. He was born and raised in Michigan and is a graduate of Michigan State University.


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