Buying a car with bad credit may seem difficult, but it's actually easier than you think. Many dealers now allow you to buy a car without having good credit. Here, we tell you how to find these dealers and the requirements to buy a new or used car with bad/no credit, especially when you have been rejected before.


How can you buy a car with bad credit?

It's not as hard as you think.

The most important thing for you to buy a car with bad credit is to look for options. Not all car dealers will be good for you. Many will give you a car if you have bad credit, but they will not always work in your favor. Having a good credit score is very important, but it is not really a necessity.

The first and most important thing to know: the average interest given by some lenders to their clients with good credit is between 4% and 5%, while some high-risk lenders give between 10% and 13%, depending on their credit score. Other car dealers may give a higher figure, so it is very important to compare interest rates.


Having bad credit does not mean you have no options when buying a vehicle. We will now show you the options you have to buy a car with bad credit. Follow our step-by-step guide to find the best price and pay less in interest when buying a car with bad credit.

Check this link for more details on this topic.

1. Don't assume the worst:

Don’t allow anyone to tell you that you have a bad credit score. They might be wrong or maybe talking without any concrete evidence. To become aware of your status, ask for a credit report so you can know your credit score exactly. Learning about the credit score isn’t much difficult. Our post about understanding your credit score can help you out.

Even two people with the same score are not the same in the eyes of a lender, so if your credit is not as good as you think, you may have more chances with the right used car dealer than someone else in this situation.

2. Aim High:

Keep one thing in mind – having a loan to buy a car means less money in a short time, and a car is easier to recover by a lender than a house. The same credit that put you at a high-risk point for the loan may help you get the car you want, that's why you should aim high. You can get a good car loan easier than a good house loan; all you have to do is be brave and follow a few simple steps.

3. Compare options:

Some lenders will see your credit score more positively than others. That is why it is important to look for many options and not abide by a specific one, but you must be careful since some may be a trap.

4. Start from the basics:

Let’s assume that the car dealers will not give you the loan; you lose nothing by asking your trust bank or your nearest credit union. They will give you the best interest rates, as dealers earn money by making you pay more interest and hidden fees.

5. Get the best lenders:

Search from known sources of lenders that finance vehicles. These include national and regional banks, as well as online lenders. In-house financing options by some used car dealers are definitely an option to investigate.

You can check our three-part series on in-house car financing options (Part 1, Part 2, Part 3) and understand easily about how this option works.

6. Do not go alone:

Ask a friend or close relative to go with you. Not only is it moral support, but it will also help you listen or see what the lender will offer you, providing you another point of view and different perspective. It will also help you see the tactics that some sellers use to scam their customers.

7. Do not be fooled by monthly payments:

Don't be fooled; there will be lenders that will offer you fairly low monthly payments for a long period of time. The only way you can complete payments is under a long period of time. That’s why it is a better option to have a higher downpayment so that you can feel comfortable and are not packed with endless monthly payments. Not sure how you can calculate payments on your auto loans? You can check our post on auto loan calculators that will help you out.

The best advice: Multiply the number of monthly payments by the number of payments you will make to get the total amount you will pay, including interest.

8. Beware of "extras"

Some contracts will be full of some "extras" in which you can get things like guarantees, insurance, among other things. They may be flashy, but they will be a charge in the future and you may not be able to afford with them.

9. Beware of the “me” or “yo-yo” scam

If you plan to buy a car with bad credit through a dealer or dealership, make sure the deadlines are agreed, without contingencies or conditions before you sign and leave with your vehicle. Many buyers have complained that days or weeks close to their payment notice that the agreed price had increased. This is also known as the "yo-yo" scam. Victims of these types of scams pay a percentage of 5% above the interest rates.

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