Terrified of Getting a Bad Credit Car Loan?

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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.


, - October 31, 2019

Getting a car loan doesn’t have to be scary when you work with CarsDirect. In fact, there are a lot of benefits to getting a bad credit auto loan from a subprime lender. Let us help you by putting some bad credit car buying myths to rest.

Bad Credit Car Loans Aren’t a Myth

There are benefits to a bad credit auto loan, such as the chance to rebuild your credit, but there are conditions, as well. Even though many bad credit borrowers wish they could ignore the consequences of actually having imperfect credit, the truth is that bad credit has a big impact on car loans. In fact, poor credit can not only impact the loan itself (such as the interest rate and loan term), it can make it more difficult to qualify.

To clarify: if you qualify for an auto loan with bad credit, the process typically isn’t going to be as easy as you’d like, and the rates and terms you qualify for aren’t going to be the best. However, there are a whole group of car lenders available that work specifically with people in many types of bad credit situations. They’re called subprime lenders, and they understand that your credit score only tells half the tale when it comes to auto loan eligibility.

4 Myths about Bad Credit Car Loans

With bad credit, it’s understandable that you may have some reservations about financing a vehicle. While buying a car can be scary, it doesn’t have to be.

Here are four bad credit car buying myths, and the truth behind them:

  1. You can’t buy a new car when you have bad credit – You might think you’re doomed to drive a clunker if your credit’s suffering, but that’s usually not the case. Depending on your situation, the lender you’re working with, and the type of vehicle you need, a new car may not be out of the question. However, since the price of new vehicles has been on the rise, you might want to opt for an affordable, reliable used car with a warranty instead, such as a certified pre-owned vehicle.
  2. To save money, buy a cheap used car – If saving money is your goal, a cheap used vehicle isn’t the way to go. Sure, you may see a lower price up front, but the real cost of an older used car is in fuel, insurance, and repairs. Today's vehicles are more fuel efficient, and tend to need less maintenance than older cars – especially ones priced low due to high miles. If you want to save money on a used vehicle, opt for an affordable, reliable model that holds its value.
  3. Your interest rate is going to be 25% or higher – Honestly, no matter if you have bad credit, good credit, or something in between, your credit score affects the interest rate you qualify for, but it’s just one factor. As a bad credit borrower, your interest rate is going to be higher than it would be if you had good credit, but it might not be as high as you think. If you qualify for a loan with a high interest rate now, you have a chance to improve your credit score so you can get a loan with a lower rate the next time.
  4. Making a smaller down payment leaves you more money for other car needs – A down payment may seem like a waste of money, but in reality, putting money down is the smartest thing you can do to help yourself with an auto loan. The more money you use as a down payment, the more money you’re going to save over the life of your car loan. A down payment means you borrow less money, which means there’s less of a loan balance for interest charges to accrue on.

Deciding on a Dealership Doesn’t Have to Be Stressful

Other things that can put your fears to rest are the help of a knowledgeable, experienced dealer, and working with the right kind of lender for your credit situation. That’s where we come in. Let CarsDirect be the light that drives away your shadows of doubt.

We’ve been helping people just like you find the local dealerships they need for their credit for over 20 years, and we want to help you, too. Whether you’re looking for a new or used vehicle, or just need to be connected to a special finance dealer near you, we’ve got you covered.

To get the process of being matched to a local dealership started right now, simply fill out our easy, no-obligation auto loan request form and we’ll go to bat for you!

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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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