Looking for a car with bad credit can be tough, but many dealerships offer financing for buyers with low credit scores. They make car ownership more achievable by offering flexible loan terms even for those with financial struggles. Knowing how these dealerships work and what options are available can help you make an informed decision when buying your next vehicle.
Author of articles
Marina K
Update 05.02.2025
Finding a car when you have a bad credit score can be tough, but many dealerships in the U.S. focus on helping those with bad credit. These dealerships offer customized financing options to help you get a car that meets your needs and your budget.
Financing with Bad Credit
Financing a car with bad credit is an option for those who need a car. However, getting a loan with bad credit means less favorable terms. Lenders see bad credit as higher risk and that typically means higher interest rates.
While getting a loan with bad credit is possible the costs can be big. Remember your credit score is just one of the factors lenders look at. Other things like your debt-to-income ratio, job history, and overall financial health can also affect the interest rate you get. If your financial situation is solid overall you may still be able to get better terms even with bad credit.
Best Bad Credit Auto Loans
Carnava
Overview. Carvana is an online platform that buys used cars and finances them. With over 20,000 vehicles to choose from customers can browse to paperwork all online. The company has a flexible approach for buyers with bad credit including a 7-day test-to-own period. Carvana also allows customers to apply for the Clean Vehicle Tax Credit on eligible used electric vehicles and plug-in hybrids.
Best for. Carvana is for anyone looking for a no-hassle car buying experience that accommodates credit requirements. It’s for buyers who want no negotiation and want to take advantage of the Clean Vehicle Tax Credit. The platform is great for those with bad credit, limited credit history or need a co-signer.
Minimum credit score. None.
Minimum annual gross income. No minimum but the loan approval process looks at the overall financial profile.
Loan terms. 12 to 72 months.
Pre-qualification or preapproval. Carvana offers pre-qualification with a soft credit check.
Origination or processing fee. None.
States covered. All states except Alaska and Hawaii.
Restriction. Vehicles purchased through Carvana must be no more than 10 years old and have no more than 200,000 miles. Carvana also requires the loan-to-value ratio to be reasonable but doesn’t specify an exact max. Active bankruptcies are not eligible for financing.
Loan amount. $1,000 to $125,000.
APR. 6.85% to 27.95%.
Approval speed. Loan approval is immediate and approved offers are good for 30 days.
CarMax
Overview. CarMax is a national-used car dealership that offers direct financing through CarMax Auto Finance. It has a large selection of pre-owned vehicles and a no-haggle pricing policy, so buyers can shop and finance cars online. Customers can pick up their vehicle at a CarMax store or have it delivered to their home. The company also offers a 10-day return policy and financing options through CarMax Auto Finance or its partners.
Best for. CarMax is for buyers who want a smooth online car buying experience with over 40,000 vehicles to choose from. It’s perfect for those who want financing through CarMax Auto Finance or its partners and for first-time buyers who need flexible financing options to qualify.
Minimum credit score. None.
Minimum annual gross income. Varies by finance source and application.
Loan terms. 24 to 72 months.
Pre-qualification or preapproval. Offers pre-qualification with a soft credit check.
Origination or processing fee. None.
States covered. All states except AK, AR, HI, MT, ND, SD, VT, WV, and WY.
Restrictions. Maximum vehicle age is 11 years and while there is no specific mileage limit higher mileage vehicles are less frequent. Financing is only for vehicles purchased directly from CarMax and applicants cannot have active bankruptcies.
Loan amount. $500 to $100,000.
APR. Starting at 5.75%.
Approval speed. Within 5 minutes for most applicants. The approved loan offer is good for 30 days.
Autopay
Overview. Autopay is an auto loan aggregator that works with around 220 lenders to offer various loan options including refinancing and cash-out refinancing. It has a fast funding process, pre-qualification with a soft credit check, and terms of up to 96 months. Autopay connects borrowers with multiple lenders but loan terms and fees vary.
Best for. Autopay is for those who want to compare multiple loan offers quickly, those with less-than-perfect credit, and those who need extended loan terms. It’s also perfect for getting pre-qualified before buying a car.
Minimum credit score. No minimum credit score is required as Autopay works with lenders who accept a wide range of credit profiles.
Minimum annual gross income. $30,000.
Loan terms. 24 to 96 months.
Pre-qualification or preapproval. Autopay offers pre-qualification with a soft credit check.
Origination or processing fee. Over half of Autopay borrowers will pay an origination fee up to $450, but this fee may vary by lender.
States covered. Autopay is available in all states in the U.S.
Restrictions. Autopay’s restrictions vary by lender, but typically loans require the vehicle to be 10 years old or newer with fewer than 150,000 miles. Each lender may also have restrictions on loan-to-value ratio and vehicle eligibility.
Loan amount. $2,500 to $100,000.
APR. APR rates through Autopay start at 5.69%, but the exact rate will depend on the lender, credit profile, and loan terms.
Approval speed. Pre-qualification takes 10 minutes to 2 hours. Once pre-qualified, you will receive offers and the loan approval process will be quick.
Auto Credit Express
Overview. Auto Credit Express is a service that connects borrowers with bad credit to a network of car dealers and lenders in the U.S. and Canada. It helps buyers with low credit scores, bankruptcies, or repossessions. While it doesn’t offer loans directly, it facilitates connections between car buyers and flexible lending options. Auto Credit Express works with over 1,500 dealerships, including those that offer subprime financing and Buy Here, Pay Here (BHPH) options.
Best for. Auto Credit Express is for individuals with poor credit who need help finding an auto loan. It’s especially good for those who can’t get approved by traditional lenders and need help finding dealerships that work with subprime lenders. It’s also a great option for first-time buyers who can’t get a loan on their own.
Minimum credit score. The minimum credit score varies by lender, but some in the network accept scores as low as 525.
Minimum annual gross income. $21,600.
Loan terms. 36 to 72 months.
Pre-qualification or preapproval. Pre-qualification is not available through Auto Credit Express.
Origination or processing fee. Auto Credit Express doesn’t charge an origination fee. However, individual lenders or dealerships may charge fees.
States covered. All 50 states in the U.S.
Restrictions. For purchase loans, applicants must buy a car through a participating dealership. No maximum vehicle age is provided for used car financing, but the maximum mileage is 150,000 miles. For refinancing loans, the vehicle should not be over 10 years old.
Loan amount. $5,000 to $50,000.
APR. Varies by lender.
Approval speed. Applicants will hear back within 24-48 hours and then need to visit the dealer to finalize the loan terms and documents.
myAutoloan.com
Overview. myAutoloan.com is an auto loan marketplace that connects borrowers with multiple lenders to receive loan offers. It offers financing for new and used car purchases, refinancing, and lease buyouts. The platform has a 100% online application process including document upload and many of its lenders offer pre-qualification with a soft credit inquiry. Since 2003 myAutoloan.com has helped borrowers get competitive loan rates, including for those with fair or poor credit.
Best for. myAutoloan.com is for borrowers who want to compare multiple auto loan offers from different lenders without having to submit multiple applications. It’s good for individuals with fair credit scores or those looking to refinance, private party purchases, or lease buyouts. Also, it’s for applicants who are open to using a co-signer or co-borrower to qualify for a loan.
Minimum credit score. 600.
Minimum credit history. 6 months.
Minimum annual gross income. $21,600.
Loan terms. 24 to 72 months.
Pre-qualification or preapproval. More than half of myAutoloan.com’s lenders offer pre-qualification with a soft credit check, and some may offer preapproval with a hard credit inquiry.
Origination or processing fee. None.
States covered. All states except Alaska and Hawaii.
Restrictions. New vehicles must have fewer than 5,000 miles and be from the previous model year. For used purchase and refinance loans, the maximum vehicle age is 10 years and the maximum mileage for used purchase loans is 125,000 miles.
Loan amount. $8,000 - $100,000.
APR. APR rates start at 6.94% but may vary by lender, borrower’s credit profile, and loan terms.
Approval speed. Approval time varies by lender but once approved the loan offer is good for up to 45 days.
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What Credit Scores Do Auto Lenders Use?
When applying for an auto loan, lenders may use different credit scores than what you see. The most common are FICO Scores 8 and 9 which provide a general view of creditworthiness and can be accessed through credit monitoring services. Some lenders use FICO Auto Scores, which focus more on your auto loan history and repayment likelihood. Another model is VantageScore® 3.0 or 4.0 developed by the three major credit bureaus and calculates creditworthiness similar to FICO scores but with slight differences. You can’t control which score lenders use, but your FICO score can indicate your approval chances. Those with good or exceptional credit are more likely to be approved, while those with fair or poor credit may have limited options and stricter terms.
However, using your base FICO credit score can be a good indicator of your approval chances.
FICO Score Range
Exceptional. 800-850
Very good. 740-799
Good. 670-739
Fair. 580-669
Poor. 300-579
What Credit Score You Need for an Auto Loan
There isn’t a single credit score required for an auto loan, as lenders consider multiple factors when reviewing your application, including income and credit score. While your credit score is important in determining your ability to repay a loan, its impact varies by lender and credit scoring model. Generally, the higher your credit score, the better your chances of getting a loan with a lower interest rate and more favorable terms.
Average Auto Loan Rates by Credit Score
Poor (300-579) - 15.43%
Fair (580-679) - 13.00%
Good (670-739) - 9.73%
Very good (740-799) - 6.70%
Exceptional (800-850) - 5.08%
Source: Experian Q3 2023
How to Improve Your Chances with Bad Credit
Show you can make loan payments. Lenders look at more than just your credit score. A record of on-time auto loan payments is a good sign, while a repossession raises significant concerns. Be prepared to show proof of income and other financial documents.
Lower the amount you need to borrow. Reducing the loan amount can increase your chances of being approved. Think about making a down payment or trading in your vehicle to decrease the financed amount. A down payment also shows you’re committed to repaying the loan.
Consider a co-signer. Having a co-signer with good credit can boost your approval chances by providing a safety net for lenders. Some lenders may require one for applicants with bad credit but keep in mind missed payments will affect both the borrower’s and co-signer’s credit scores.
Pay off existing debt. Paying off current debt can improve your debt-to-income ratio and strengthen your loan application. Try not to open new credit accounts before you apply.
Check your credit report. Get your credit report at least 30 days before applying. Dispute any errors to improve your score and make sure you’re in the best position for approval.
Conclusion
You can get a car loan with bad credit through dealerships and specialized financing options but be prepared for higher interest rates. Dealers like Carvana, CarMax, and Auto Credit Express offer flexible terms, and having a down payment or co-signer can increase your chances of approval. You may also consider credit unions or buy here, pay here dealerships but their rates will be steeper. Make sure to research loan details and fees to get the best financing option.
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FAQ
How do buy-here, pay-here dealerships differ from regular auto lenders?
Buy-here, pay-here dealerships provide direct financing meaning they handle the loan process themselves without involving third-party lenders. This can make it easier for those with bad credit to get approved as they don’t perform traditional credit checks. However, the trade-off is higher interest rates, fewer car choices, and limited benefits like credit reporting which can help rebuild your credit. Traditional lenders though more strict in their approval process may offer more competitive rates and wider car selection if you meet their credit requirements.
Is it better for buyers with poor credit to choose a shorter or longer loan term?
For those with poor credit, a shorter loan term may mean higher monthly payments, but less total interest paid over the life of the loan. A longer loan term can mean lower monthly payments, making them more manageable, but you’ll end up paying more in interest over time. Research your monthly budget and long-term financial goals to find the right balance for you.
How do I know if the auto loan offer is fair for my credit score?
To determine if the auto loan offer is fair, research the typical interest rates for borrowers with your credit score. Compare those rates to the one you’re being offered. Make sure to check for any hidden fees and calculate the total amount you’ll pay over the life of the loan. This will give you a clear picture of whether the offer is good for your credit situation.
