Car Dealers That Accept Bad Credit in 2021

Car Dealers That Accept Bad Credit
GUIDE
Eric Bank
By: Eric Bank
Posted: April 15, 2021
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If you think it’s unlikely to find nearby car dealers that accept bad credit, think again. Poor credit need not consign you to a clunker, thanks to the car dealerships and networks that gladly serve consumers with any type of credit. These dealers can risk a bad credit car loan to a car buyer with a bad credit score because the financed cars serve as collateral — if a car buyer defaults on payments, the car can be repossessed.

Given the many choices, a little comparison shopping can help you identify the best deals available for your credit situation. That makes it easy for you to find a bad credit auto loan for a new or used vehicle with affordable payments and a reasonable interest rate.

Lender Networks | Dealers | FAQs

Networks That Can Connect You to Car Dealers That Accept Bad Credit

The following three networks can match you to a bad credit car dealer willing to work with you to finance a car. There’s no charge for this service, and you’re never under any obligation to agree to a loan. Applying for a bad credit car loan couldn’t be easier — you need not leave the comfort of home to arrange the transaction.

If things go smoothly, you could have a new car in your driveway before the day ends.

  • Network of dealer partners has closed $1 billion in bad credit auto loans
  • Specializes in bad credit, no credit, bankruptcy and repossession
  • In business since 1999
  • Easy, 30-second pre-qualification form
  • Bad credit applicants must have $1500/month income to qualify
  • Click here for application, terms, and details.
★★★★★

4.9

Overall Rating

Interest Rate In Business Since Application Length Reputation Score
3.99% - 29.99% 1999 3 minutes 9.5/10

Auto Credit Express works with a network of dealers throughout the country that can help you find the car you want and the deal you can afford, even if you have less than good credit. It takes only a minute to complete the short loan request form that Auto Credit Express uses to qualify you for a loan. You’ll then be contacted by a nearby bad credit car dealer that can complete your financed purchase as quickly as later in the same day.

Car.Loan.Com works with the nation’s largest network of auto dealers that specializes in bad credit financing of cars for consumers with less than good credit. It will take you only a few minutes to complete the loan request form and prequalify for a sub prime auto loan. The network is known for speedy action, so don’t be surprised if you hear back from a direct subprime lender within minutes of prequalification.

The MyAutoLoan.com network can handle any kind of car financial request, including loans for new and used vehicles, cash-out refinancing, and other financing options. This auto lender matching service can provide you with up to four loan offers in just a few minutes. You can then evaluate the details of each offer before deciding which one to pursue.

Dealers That Accept Bad Credit Applicants

Bad credit is OK with the following subprime lender triplet, as they all have long experience working with subprime borrowers. You can choose companies that operate exclusively online or those with a bad credit car dealership that you can visit to pick out your next vehicle.

4. DriveTime

DriveTime LogoWith more than 130 dealerships nationwide, DriveTime can provide you with a loan despite your poor credit score. It boasts a track record of 4 million vehicle loans since its founding, during which time DriveTime perfected the process of speedy approval for most applicants.

The loan offer you receive will specify an initial down payment and subsequent monthly payment installments that you can afford for a car priced to fit your budget.

5. Carvana

Carvana LogoCarvana is a pioneer in no-contact car sales in which you can select a vehicle and arrange auto financing online, and then accept the car delivered directly to your home. Carvana provides bad credit financing on its own but permits you to use an external lender if you prefer.

It can take as little as 10 minutes to wrap up the loan process and schedule vehicle delivery.

6. CarMax

CarMax LogoWell-known for its TV commercials, the CarMax network of almost 200 nationwide dealers routinely accepts loan applications from drivers with poor or thin credit. You can finance your car with CarMax or choose an outside lender, including Wells Fargo Auto and Capital One.

However you proceed, CarMax can sell you a car or refinance your current vehicle, whatever your credit profile.

Do Car Dealerships Approve Bad Credit?

The business model of a bad credit car dealership is usually predicated on selling vehicles to consumers with below-average credit. They are able to do so because vehicles serve as collateral for their own bad credit auto financing.

If you can’t afford to make the payments, the car dealer will repossess the car and sell it to someone else. Contrast this to the plight of personal loan providers, who may collect only a small amount of the borrowed sum if you default on the loan.

The lien they have on a car’s title permits lenders to repossess vehicles for non-payment, reducing an element of risk that would otherwise discourage the lending process. The car dealerships and lending networks featured in this review have the experience to decide bad credit auto financing transactions for lenders of every stripe.

If you use Auto Credit Express, Car.Loan.com, or MyAutoloan.com, you’ll have a network of lenders at your disposal that will work quickly to get you the deal you need.

What Info is Needed to Fill Out an Auto Loan Application?

You will be asked to provide information, including your name, address, Social Security number, employment and income data, existing debts, and other financial data. When you go through a car dealer network, the prequalification step uses a subset of this information combined with data gleaned from a soft pull of your credit history from one or more credit bureaus.

Car Loan Application

A car loan application will require your basic personal info as well as your income and employment details.

After you prequalify, the dealer will submit a hard inquiry and collect additional information before completing the offer. Beyond your bad credit score, a lender’s finance department typically looks at past defaults, write-offs (including those from a bank or credit union), collections, repossessions, and bankruptcies. These need not be fatal, especially on secured loans like those for automobiles.

Which Credit Score Do Car Dealerships Use?

It’s always a good idea to check your credit score before applying for a loan. Knowing your score in advance will help you anticipate how much you’ll be allowed to borrow and the terms of the loan, including interest rate, loan term, and monthly payment amount.

Automobile-oriented scoring systems pay special attention to data that may impact a dealer’s loan decisions, such as:

  • Car-related bankruptcies
  • A thin or short credit history
  • Late automobile payments
  • Repossession and collection activity related to car loans
  • Lack of different credit types used

Auto dealers can choose among several credit scoring systems when underwriting a loan, including:

  • FICO Auto Score: There are several versions of this score, including Versions 2, 4, 5, 8, and 9. All have a range of 250 to 900, and Version 9 is used by all three credit bureaus.
  • TransUnion CreditVision: Tailored to the prime and sub prime auto loan marketplace with trended data going back as far as 30 months. FICO Auto Score 9 XT utilizes the CreditVision trended data.

Other scoring systems may be used by certain car dealership organizations, as new systems are frequently released in an attempt to provide the most relevant, actionable information for an auto lender’s finance department.

How Can I Improve My Auto Loan Terms?

In the car buying process, one of the easiest ways to get better terms on your sub prime car loan is to recruit a cosigner with stellar credit who will be responsible for any payments you miss. The loan term specifics should be based on the cosigner’s credit score.

In addition, it’s helpful to provide equity for your vehicle loan through a down payment or trade-in. By contributing equity, you have more “skin in the game,” meaning the possible forfeiture of your equity should motivate you to keep up with payments.

Auto Loan Terms Graphic

You can also take steps to improve your credit score to land better loan terms. This means paying all your bills on time, keeping your debt-to-income ratio below 28%, and cleaning up your credit report, either by yourself or with the help of a credit repair agency.

As the following chart shows, your credit score can greatly impact the interest rate on your auto loan:

Average Auto Loan Interest Rates

Whether you buy a used or new car, a better credit score means a better interest rate.

Car Dealers That Accept Bad Credit Can Help You Get Back on the Road

Hundreds of car dealers throughout the United States accept bad credit. We’ve reviewed three direct lenders and three lending networks that each offer multiple types of loans. All this goes to show that bad credit need not prevent you from getting a new or used car.

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