Debunking 8 Car Buying Myths

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Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.

, Contributing Writer - June 3, 2020

There are lots of myths that surround bad credit auto loans and the car buying process in general. We’re here to debunk some of them so you can be a more informed buyer!

Myth #1 – “Having your credit checked by multiple lenders lowers your credit score.”

If you apply for the same type of loan within around two weeks, your credit score is only impacted by one hard inquiry! This is called rate shopping. The credit reporting agencies understand that when you apply with a few auto lenders for the same type of credit in a short time, you’re considering taking on new credit and you aren’t penalized for looking for the best deal. If you have a lender review your reports, this slight drop in your score is temporary and rebounds after about a year.

Myth #2 – “You don’t need to worry about your credit if your spouse has a good credit score.”

Credit scores aren't combined when you're married, so if you're considering applying for a joint car loan with your spouse, both your scores are going to be considered individually. When you and your spouse apply together, your incomes are combined – not your credit scores.

Myth #3 – “Checking your own credit reports hurts your credit score.”

This simply isn’t true! Reviewing your own credit reports doesn’t harm your score. When you review them yourself, it’s called a soft inquiry. In fact, you’re entitled to a free copy of your credit reports once a week until April 2021, from each of the three credit bureaus: Experian, TransUnion, and Equifax. You can get them by visiting You can request one from each bureau every 12 months after April 2021.

Myth #4 – “Longer auto loans save you money.”

The opposite is true with this one – while a longer loan lowers your monthly payment, you pay more in the long run. The longer the loan, the more you pay in interest charges. Car loans are nearly always simple interest loans, which means you’re charged interest on the balance of your loan. The quicker you pay it off, the less interest you pay.

Myth #5 – “Going to a dealership on a rainy day gets you a better deal.”

This myth has actually increased traffic for dealers on rainy days! Some of the busiest days for many businesses are Mondays and the first of the month. Additionally, dealerships are known to offer deals during major holidays, such as Memorial Day and Labor Day, increasing traffic even more. Take advantage of holiday deals (instead of the weather!) if you’re looking for a good price on your next vehicle.

Myth #6 – “I should expect my trade-in value at the dealership to match my online valuation.”

While online car valuation sites are great resources and can help you get an estimate for your trade-in, the dealer is the one that decides the actual cash value of your vehicle. The online valuation can be a good starting point, but it’s not a hard-and-fast guarantee of the price you're going to get.

Myth #7 – “All cars are covered under lemon laws.”

The truth is, only six states have used car lemon laws. For the most part, lemon laws cover new vehicles, and these laws vary in every state. There isn’t one blanket law covering every state. If you think you’ve got a lemon, check with your own state's laws and guidelines to see what you can do.

Myth #8 – “You can’t get an auto loan with bad credit.”

There are plenty of lenders and dealers that approve bad credit borrowers. Some used car lots, called buy here pay here (BHPH) dealerships, don’t check your credit score when you apply! These dealers may offer higher-than-average interest rates and require a down payment, but they do help borrowers with even the worst credit get an auto loan. The loan may not be reported to the credit reporting agencies, so your score may not rise, but if you need transportation quickly, BHPH dealerships can be a great route.

There are also subprime lenders that work through some dealer’s special finance departments, and they report car loans to the credit bureaus. With a subprime auto loan and on-time payments, you can even improve your credit score along with getting financed for your next vehicle.

Driving Forward

Now that you’re armed with knowledge about your credit reports, loan terms, and bad credit car myths in general, you can shop with confidence. If you’re looking for a bad credit auto loan, and you don’t know where to begin, we want to help!

Here at CarsDirect, we’re able to debunk myths because we have a nationwide network of special finance dealerships that work with subprime lenders. We connect borrowers in all types of credit situations to help them get the car financing they need.

To get matched to a dealer near you, simply fill out our free auto loan request form. There’s no obligation, it's secure, and we’ll get to work for you right away!

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, Contributing Writer

Bethany Hickey is a graduate from the University of Michigan-Flint, with a bachelor’s in English-Writing. She is a content writer for Auto Credit Express, CarsDirect, and many other automotive blogs, as well as the Poetry Editor for UM-Flint’s writing magazine.

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