Finding Car Finance Companies That Work with Bad Credit

Get Car Financing
Even with poor credit.

By

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - May 28, 2019

When you have bad credit and need a car loan, the last thing you want to do is waste time looking for financing from a lender that promises the world but ultimately can't help you. Instead, you need to know your credit situation and the options that are available to you.

Why You Can't Get Car Financing Everywhere

Traditional banks, credit unions, and auto finance companies base loan approval on your credit score, and not all of them work with people who have poor credit. Specifically, big banks and lenders that work through certain franchised dealerships typically have a harder time dealing with bad credit borrowers.

But, just because these finance sources don't work with credit issues doesn't mean you're out of options.

Car Finance Companies for Bad Credit

Because not all dealers work with bad credit, it's important that you know where your credit stands before you jump into the car buying process. By knowing your credit score and what's on your credit reports, you're able to better determine which type of lender is best for you.

Let's look at the types of auto finance companies that may be best suited to working with you:

1. Direct Lenders: There are a few different options for getting a direct loan. If you're a member in good standing at a credit union, they may be able to help you. When you get a loan from a credit union, it's similar to what you might get from a bank, except big banks tend to reserve their loans for people with good credit. Because credit unions are smaller, not-for-profit organizations, they have the ability to offer loans when banks may be unwilling to.

You can also get a direct loan from online lenders such as Capital One, Roadloans, Lendingtree, and many others. These finance companies work like banks, except you're doing the paperwork online rather than sitting face to face with a loan officer. When you get a direct loan, there's no question of how much you can spend at the dealership, because you've already got the check. This can make shopping for a vehicle a lot easier.

2. Indirect Lenders: Indirect lenders are those that work exclusively through dealers. Not all indirect lenders work with people in poor credit situations, but some do. A few manufacturer-specific lenders do dabble in the subprime market. Some examples are Ford Motor Credit, Kia Motors Finance, GM Financial, and Hyundai Motor Finance. You’re more likely to find financing as a bad credit car buyer from one of these non-luxury brands if you want to go this route.

3. Subprime Lenders: Another financing option for bad credit is a subprime lender. Unlike traditional lenders, subprime lenders look beyond your credit score to base an approval for financing on factors such as income, employment, and residence stability. These lenders are also considered indirect lenders, because you can't sit down with them, who work through special finance dealerships. Not all dealers that are considered special finance advertise this fact, so it can be tough to pinpoint if a dealership in your area works with the right kind of lenders for you.

4. Buy Here Pay Here Lots: These car lots are typically a last resort option because the loans usually carry the highest interest rates. However, they can be a good option for someone who's already been turned down for a bad credit auto loan, because these lenders don't typically check your credit. BHPH dealers base approval on income and down payment. They are both dealerships and lenders, so they have an easier time approving you, typically with fewer requirements.

We Can Help You Find Dealers

Here at CarsDirect, we know how to help you find the local dealers that work with lenders equipped to assist people in bad credit situations. By simply filling out our fast, free, and easy car loan request form, we can get you connected to a dealership in your area. So, what are you waiting for?

Need a Car Loan?

It only takes a minute.

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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