Vehicle Eligibility Rules for Bad Credit Car Loans

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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.


, Contributing Writer - January 19, 2018

Subprime lenders restrict eligible vehicles by age, mileage, amount financed, and more to give bad credit loans a better chance of being completed.

Eligible Vehicles for Bad Credit Auto Loans

Subprime lenders will finance borrowers with bad credit, but they have specific rules and guidelines for approval, including those for vehicle eligibility. These are the typical vehicle restrictions:

  • Vehicle Type: Borrowers with bad credit can only finance passenger vehicles. Subprime lenders typically won't finance commercial vehicles, delivery vehicles, recreational vehicles, or motorcycles.
  • Age and Mileage: Bad credit lenders generally will only finance vehicles that are 10 years old or newer with less than 100,000 miles on the odometer. These numbers can vary depending on the length of the loan term. Lenders may be more lenient with shorter loans, but more restrictive with longer terms.
  • Amount Financed: The price of the vehicle being financed can be a factor, as subprime lenders set the lowest amount borrowers can finance at $5,000. The maximum amount financed varies depending on the lender and program.
  • Title or History Problems: Many lenders will not purchase contracts for vehicles with branded, salvage, or rebuilt titles, cars with frame damage or unresolved accidents, and stolen or totaled vehicles.

Every lender has their own set of rules for vehicle eligibility, so don't expect these facts and figures to be universally standard. The fine print can vary, but these restrictions (or something similar) are typical for subprime auto loans.

Why Do These Rules Exist?

A borrower may be under the impression that looking for a small loan on an older used car is the way to approach a subprime auto loan, but the eligibility rules prevent this. Subprime lenders want borrowers to continue paying, which isn’t as likely with an older, higher mileage vehicle that has a greater chance of breaking down.

Lenders and borrowers both lose when things go south on a loan, and these vehicle eligibility standards decrease the chances of this happening.

Teaming Up with a Dealership That Can Help

CarsDirect helps consumers find financing by connecting them with local dealerships that work with subprime lenders. We want to set you up with a dealership that can help – even if you're dealing with problem credit. Begin the process by submitting our free and secure auto loan request form today.

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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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