Where to Go to Get a Bad Credit Auto Loan

Get Car Financing
Even with poor credit.


Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

, - April 8, 2019

If you have bad credit and you’ve been turned down by a traditional lender, you’re limited to a couple of options when it comes to auto financing: a special finance dealership or a buy here pay here (BHPH) dealer. Both are well-equipped to handle credit-challenged car buyers, but which type of dealership should you visit? It really depends on your current credit and income situation.

Dealerships That Offer Bad Credit Auto Loans

When you have bad credit, you have two different types of dealers you can work with:

  1. Special finance dealerships – Special finance dealers work with subprime lenders. These lenders specialize in bad credit auto financing, and are more willing to work with credit-challenged consumers. Subprime lenders look at your credit score, but consider other factors such as income and employment to determine approval. We’ll discuss these in depth later on.
  2. Buy here pay here dealershipsBHPH dealers are also the lenders, and finance the vehicles on their lots in-house. This means they can sell you a car and offer you financing at the same place. These dealerships don’t typically check your credit unless they state otherwise, and base approvals on your income and down payment.

Requirements for a Bad Credit Auto Loan

What you need in order to qualify for a bad credit auto loan depends on whether you go to a subprime lender or a BHPH dealer. BHPH dealerships ask that you provide proof of income and have a down payment.

Subprime lenders ask for more, including:

  • Income – Most subprime lenders ask that you make at least $1,500 to $2,000 a month before taxes, although the required minimum amount varies from lender to lender. Subprime lenders are going to ask for proof of income in the form of a recent computer-generated pay stub showing your year-to-date earnings, and also like to see a stable work history (six months on your current job, and a three-year work history with no long gaps between jobs).
  • Down payment – You typically can’t get out of the down payment requirement, but you don’t need to make a large one. Subprime lenders generally ask for a minimum of $1,000 or 10 percent of the vehicle’s selling price, whichever is less. If you can put more down, you should because it helps you save money in the long run.
  • Residency – The lender wants to make sure you live where you say you live. Bring in a copy of a recent utility bill, in your name, showing the address listed on the application to be your proof of residence.
  • Phone – Lenders also need to make sure they can contact you. Make sure you bring in a recent phone bill from a national carrier.

CarsDirect Tip: Before you head to a local dealer, it doesn’t hurt to try and get pre-approved for financing from your local bank or credit union. If you're able to get pre-approved, it can make your car buying experience that much easier. Even if they turn you down, you now know just what you’re dealing with.

Need Help Locating a Dealership?

When you feel ready to get the car buying journey started, we’re here to help you get on your feet and into the doors of a dealership. At CarsDirect, we work with dealers across America that have the lenders available to work with people who have credit challenges.

Getting the process started is simple. Fill out our online auto loan request form, and we’ll get to work matching you with a local dealership!


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Megan Foukes is a recent graduate from Indiana University who graduated with a bachelor’s in journalism. Megan works as a content writer for Auto Credit Express and contributes to several automotive and finance blogs.

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