Private Party Auto Loans for Bad Credit & Alternatives in 2024

Private Party Auto Loans For Bad Credit

If you need to buy a car but have a low credit score, private party auto loans for bad credit can save your bacon. These are loans to finance a car purchase from a private seller, and you can get them from some online lenders, banks, and credit unions. 

At their best, private party loans let you buy a vehicle for less than what you’d pay at a dealership. But bear in mind that this type of loan tends to charge a higher interest rate, though not as high as that of a bad credit personal loan. And, of course, if you miss payments, you risk an unhappy visit from the repo company.

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Best Overall Private Party Auto Loans

These two companies offer private-party auto loans to consumers with all types of credit. They fill an essential niche for folks who want to buy a used car from the current owner rather than a dealership.

  • Loans for new, used, and refinancing
  • Queries a national network of lenders
  • Bad credit OK
  • Get up to 4 offers in minutes
  • Receive online loan certificate or check within 24 hours
  • See application, terms, and details.
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Interest Rate In Business Since Application Length Reputation Score
Varies 2003 2 minutes 8.5/10

You can fill out a short online application at for a private party car loan and compare up to four offers in minutes. You then can complete the loan application and receive a check or online certificate within 24 hours. provides calculators and estimators on its website to help you work out the loan amount, interest rate, and monthly payments that fit your budget. 

  • Prequalify in minutes without impacting your credit score
  • Refinancing loans save an average of $191 per month
  • 125% financing available for cash-out refis
  • PenFed Credit Union membership required but can be applied for at the same time as your loan
  • See application, terms, and details.
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Interest Rate In Business Since Application Length Reputation Score
5.19% and up 1935 5 minutes 8.5/10

PenFed Credit Union is a great choice to get a private party auto loan. Credit unions generally offer the best rates and terms for consumers of all credit scores. Its loans can be used to finance the car of your choosing, but it must have fewer than 125,000 miles on it.

Alternatives to Private Party Auto Lenders

Roughly 45% of used car sales are conducted through private-party auto lenders. The rest occur at dealerships and auctions, where you’ll need a conventional auto loan or cash to drive off with the car you want. You can apply online to the following lenders for a quick auto loan even if you have poor credit.

  • 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
  • See application, terms, and details.
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Interest Rate In Business Since Application Length Reputation Score
3.99% – 29.99% 1999 3 minutes 9.5/10

Auto Credit Express doesn’t make loans; it finds them for qualified borrowers. You fill out a short loan request form to prequalify for a bad credit car loan (or motorcycle loan) from a direct lender on the company’s network. The website offers a monthly payment calculator for various loan terms.

  • Auto loans for purchase, refinance, and lease buyouts
  • Nationwide lender network
  • Get matched with up to 5 lenders that fit your financial profile
  • It only takes a few minutes and is free with no obligation
  • See application, terms, and details.
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Interest Rate In Business Since Application Length Reputation Score
Varies 1998 4 minutes 9.5/10

LendingTree can find you an auto loan for a new or used car purchase, a refinance loan, or a lease buyout. It doesn’t specifically offer private-party auto loans, but it does also offer personal loans that can be used to purchase anything you like, including a used car. But going this route may get you a higher interest rate than you could get with an auto loan.

  • Free, no-obligation application
  • Specializes in auto loans for bankruptcy, bad credit, first-time buyer, and subprime
  • Affordable payments and no application fees
  • Connects thousands of car buyers with auto financing daily
  • See application, terms, and details.
Our Rating


Interest Rate In Business Since Application Length Reputation Score
Varies 1994 3 minutes 9.0/10

The Auto Loans network has arranged more than $1 billion in prime and subprime auto loans. The network serves consumers with any financial history, from excellent to very poor. The available auto loan rates vary by lender and your credit score. 

6. Carvana

Carvana Logo

Carvana is a direct vehicle seller and lender that can prequalify you for an auto loan in two minutes without affecting your credit history or score. Your subprime credit should not hinder your chances of getting a bad credit car loan from Carvana. Borrowers must be 18 or older, earn at least $4,000 annually, and have no active bankruptcies.

7. Capital One Auto Finance

Capital One Auto Finance

Capital One Auto Finance is a leading US vehicle lender. You can prequalify for a loan without hurting your credit by filling out a short form on Capital One’s website. Its Auto Navigator shows you your financing terms before it directs you to a participating dealer. You can sign up for price alert emails to help you choose a vehicle.

8. DriveTime

DriveTime Logo

The DriveTime network of auto dealerships offers in-house financing and same-day funding, even if you have poor credit. The company’s finance affiliate, Bridgecrest, offers flexible loan terms customized for your unique situation. Its financing packages tailor your monthly payment amount and loan repayment period to match your credit rating, monthly income, and budget requirements.

9. CarMax

CarMax Logo

CarMax is a car dealership network with hundreds of locations nationwide, each staffed by a finance team specializing in finding loan options for subprime applicants. You can quickly prequalify to get an idea of how much you can afford for a used car. CarMax also works with banks and subprime lenders, including Capital One Auto Loan, Ally Auto, Exeter, and Westlake.

How Can I Get an Auto Loan With Bad Credit?

A sizable segment of the US economy focuses on one goal: To put you behind the wheel of your next vehicle. Manufacturers and dealers want to say “yes” to your financing needs and compete with one another. A grand financing infrastructure supports this marketing push, offering you a variety of ways to obtain a vehicle loan.

Car Manufacturers

Captive finance companies are the subsidiaries of vehicle manufacturers, and they’re charged with making auto loans to car shoppers. 

Examples of captive finance companies include American Honda Finance, Ally Bank (formerly General Motors Acceptance Corporation), Ford Motor Credit Company, and Toyota Financial Services. When you walk into, for instance, a Ford dealership to buy a pickup truck, the dealer will provide you with a loan offer from Ford’s captive finance arm.

You do not have to get your financing from the dealer, but these loans frequently have enticing special terms, including a cash discount or a lower interest rate. These lenders routinely extend loans to consumers with subprime credit.

Personal Loans

You can always use a personal loan to purchase a car, as personal loans do not have any restrictions on how the borrower uses the money. The downside is that with bad credit, the interest rates are likely higher for a personal loan than they are for a car loan.

You can use a loan network to easily compare loan offers, including their rates and terms. Here are our top-recommended online networks for bad credit installment loans:

  • Personal loans from $500 to $35,000
  • All credit types are considered and welcome
  • Simple, no credit impact form
  • Helping consumers since 2001
  • 4.7 out of 5 Trustpilot rating with 2,000+ reviews!
  • See official site, terms, and details.
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Loan Amount Interest Rate Loan Term Loan Example
$500 to $35,000 5.99% – 35.99% 60 Days to 72 Months

See representative example

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Loan Amount Interest Rate Loan Term Loan Example
$500 to $10,000 5.99% – 35.99% 3 to 72 Months

See representative example

Our Rating


Loan Amount Interest Rate Loan Term Loan Example
$250 to $35,000 5.99% – 35.99% 3 to 72 Months

See representative example

Online lending networks don’t originate loans. Instead, they prequalify you for a loan from a local dealership or other lenders on their networks. Many can provide multiple offers when you fill out a short loan request form. 

These loan-finding services are free, and prequalification doesn’t hurt your credit.

The online networks have minimal eligibility requirements to preapprove borrowers, but the participating direct lenders usually add criteria — such as a minimum income or credit score — that loan applicants must meet. The direct lenders perform a hard pull of your credit when you apply for a loan. 

Banks and Credit Unions

Banks don’t typically offer bad credit auto financing, although some have more liberal lending policies and offer private party car loan financing. They are not the best places to seek auto loans (or personal loans) if you have a bad credit score. 

Your best bet may be to try an online bank, as they can sometimes offer a lower interest rate because they don’t have the overhead operating expenses that brick-and-mortar banks do.

banks vs credit unions

The typical credit union is friendlier than the average bank, mainly because its customers are also its owners. If you already belong to a credit union, it may provide the best auto loan offer you’ll find anywhere. 

Many credit unions limit membership, but a few national ones are open to anyone. Credit unions are also good places to get life insurance, a credit card, and short- and long-term personal loans.

Seller Financing

Some individual car sellers may offer to personally finance your purchase. This is unusual but may be a last resort for a car owner who wants to sell a vehicle privately when the buyer can’t arrange private party financing. 

The problem for sellers is that they don’t collect the sale proceeds in one lump sum but must instead accept monthly payments over the loan term. If you take a seller-financed loan, make sure you and the seller sign a bill of sale and a loan agreement. 

Pay special attention to the provisions for repossessing the vehicle if you default on the loan.

Can You Get a Car Loan With a 500 Credit Score?

Yes, many lenders, including those for private party sales, are willing to accept a 500 credit score. These are a type of secured loan with inherently lower risk because the vehicle acts as collateral should the buyer default on the loan or fail to obtain the required auto insurance.

Invariably, car and motorcycle loan agreements give the lender a lien on the vehicle, which means the lender can repossess the vehicle without a court order. Some states limit repos in various ways, such as not allowing repossessions that breach the peace.

The reviewed online loan-finding services welcome bad credit borrowers. Many dealerships on their networks have extensive experience crafting car loans for consumers who would otherwise have no access to the loan market. 

Because these dealerships frequently self-finance car loans, good credit isn’t a requirement for approval, and they can offer loan approval without involving a bank or other financial institution.

What Are the Pros and Cons of Private Party Vehicle Purchases?

Buying a car directly from the owner presents opportunities and challenges. On the plus side, you may be able to snag a terrific deal from a motivated seller. It’s also a way to get the exact make and model you want, even if it’s in short supply on used car lots. 

But car buyers should beware that private sellers don’t have to meet the strict federal state laws binding car dealerships. You may have to accept the car as is, meaning you have no recourse if you find problems after completing the purchase. 

It can also require much more work to find a vehicle from a private seller, and you should arrange for a mechanic to inspect the car. Finally, the buyer must find financing on their own (or pay in cash or with a credit card) without the help of a car dealership.

Remember that you and the seller are responsible for all the paperwork, including the bill of sale, title transfer, registration, and taxes. Depending on where you live, you may have to ensure the vehicle is up to date on its pollution control and inspection requirements.

Caveat emptor, meaning “let the buyer beware,” definitely applies to private vehicle purchases.

How Do I Recognize a Crooked Private Party Car Seller?

Let’s face it: You may encounter shady individuals when buying a vehicle privately. Be on the lookout for telltale signs of dishonest dealings, including:

  • Lack of access to the vehicle: You don’t want to buy from anybody who won’t let you inspect or test drive the car. 
  • No guarantee: It’s not unusual for sellers to insist on an “as is” deal, but that’s riskier if the car is old or has high mileage. Demand the right to inspect the car before paying.
  • High price: Know how much you should pay for a vehicle before making an offer. Some sellers try to charge too much, hoping car buyers don’t know the actual value. 
  • Dirty or damaged vehicle: A filthy car is often a sign of owner neglect. Even if partially fixed, damage may be more extensive than what the owner claims. Always get a CARFAX or similar report detailing the car’s service history.
  • Cash only: A seller who will only take cash may not want to deal with a legitimate lending institution, perhaps for nefarious reasons.

Use your common sense when dealing with individual sellers. Check them out on social media and run a background check if you don’t like their vibes.

If You Need a Bad Credit Auto Loan, You Have Alternatives

You have several car financing alternatives even if you’ve had credit problems. These include private party auto loans for bad credit, but you can also turn to online networks and other funding sources. 

Selling cars makes money for manufacturers, financial institutions, and vehicle owners, so you will probably find at least one lender to finance a purchase.

We’ve identified two online providers of private party vehicle loans for you to consider. You can also check out your local bank or credit union. Dealers do not have a monopoly on used car sales, but always be cautious when buying from the car’s owner — it’s riskier than purchasing a vehicle from a dealer’s lot.

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