Vehicle Choices for Bad Credit Car Loans

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Even with poor credit.

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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.


, - April 14, 2020

Do you find that you need a car right now, but aren't sure you have the credit score to get approved for a loan on anything other than a cheap vehicle from a small lot? Set your worries aside, and let us tell you about the choices you may not know you have when taking out a bad credit car loan.

More Vehicle Choices Than You Think

One key thing to keep in mind is that you shouldn't get your heart set on financing your dream car when you have poor credit. Instead, you should focus on getting a reliable, affordable vehicle that holds its value.

Affordability and reliability may not be things that you think go hand in hand, especially if you're dealing with less than perfect credit. However, you have more options than you may realize even as a credit-challenged consumer.

Depending on your situation and the lender you're working with, you may even be able to qualify for an affordable new car. This isn't the case for everyone, but it is possible. If you're not qualified, there are plenty of reliable used makes and models that you can get, often at affordable prices.

Usually, you have three options when it comes to choosing a vehicle with a bad credit auto loan:

  • New car – In some cases, there are options for affordable new cars. Think of automakers with a lot of reasonably priced models such as Kia, Chevrolet, Mitsubishi, Nissan, and Hyundai. However, keep in mind your options depend on the dealer you're using.
  • Used car – Used vehicles are found at both franchised and independent dealerships, and often offer the most affordable options for bad credit borrowers. Considering cars are lasting longer than ever these days, it's not an exaggeration to say that used vehicles are better than they've ever been.
  • CPO car – A certified pre-owned car can be the best of both worlds. These are used models that are only a couple of years old that have been certified by an automaker. This option offers borrowers a newer vehicle that often has some of the latest safety and technology features, but without the new car price tag.

With Bad Credit, Car Choice Comes Second

The main difference between a bad credit auto loan and a traditional car loan is that you don't choose your vehicle first. Instead, the lender evaluates and your application and makes a loan decision first.

If you’re approved, the lender sends the dealer the lending tier you qualify for along with a payment call. This spells out your maximum monthly payment and the other terms of the loan. You’re then shown a selection of cars at the dealership that you qualify for.

You should also know that when it comes to getting a bad credit auto loan, opting for the cheapest, oldest vehicle on a lot may not be an option. In most cases, the lenders that work with poor credit borrowers have rules about the type of cars they finance.

Generally, vehicles have to be no more than 10 years old and have less than 100,000 miles on them. Additionally, these lenders usually don't offer loans that are less than $5,000. This doesn't mean the car has to cost $5,000 or more, but the total loan amount (after taxes and fees, minus the down payment, etc.) has to equal at least that much.

Work With the Right Type of Lender

When it comes to getting a bad credit auto loan, the options you have largely depend on what you qualify for. In order to get the best options while struggling with credit issues, you need to work with the right kind of lenders.

What you need in this situation is a lender that's set up to assist bad credit borrowers – called a subprime lender. These lenders know that you're more than just a credit score. They rely on additional factors along with your credit score to help get the full picture of your creditworthiness and situation to consider you for a car loan.

Even though you can typically get a loan through a subprime lender with bad credit, you have to be aware of your situation and have realistic expectations. Not all lenders work with credit-challenged consumers, and those that can aren’t signed up with every dealer.

Let Us Lead the Way

Rather than struggling to find a dealership with the right type of lenders for your credit situation, let CarsDirect help. We’re teamed up with a network of special finance dealers across the country that have the lenders available to work with people who have less than perfect credit.

No need to waste time, money, and effort driving all over town when you could fill out our free auto loan request form right from home. There's never any obligation to buy, and we can match you to a dealership in your area. Don't delay, get started right now!

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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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