When it comes to getting a bad credit car loan, you have a lot more options than you might think. You may not know it though, because a lot of the lenders that can help you get financed for an auto loan with bad credit are hiding in plain sight. But The Car Connection knows where to find them.
Who Finances Bad Credit Car Loans?
There are two main groups of lenders that finance bad credit car loans: in-house financing dealerships and subprime lenders.
In-House Financing Dealerships – In-house financing happens at buy here pay here (BHPH) lots, where the dealers are also the lenders. These car lots are good for getting a vehicle fast, and they typically don't check your credit. You're going to pay extra for those conveniences, though.
The vehicles aren't typically priced higher than at a traditional used car dealership, but you're likely to see higher than average interest rates and could be expected to make a down payment of 20 percent of the vehicle's selling price, as well. A large down payment not only reduces the amount you have to finance, it also helps the dealer cover the cost of the car.
Subprime Lenders – Subprime lenders can help people in many credit situations get the financing they need, even if they have bad credit, no credit, or are dealing with other issues like bankruptcy or repossession. These lenders only work indirectly through special finance dealerships, and you can't sit face to face with them to get a loan.
In order to help approve bad credit car buyers, subprime lenders look beyond your credit score to other factors that help them determine your eligibility for a bad credit auto loan. These factors, which include income, residence stability, and employment, help the lender reduce the risk that's often involved with poor credit borrowers.
Finding the Right Auto Financing
So, where do you find these lenders that can help you get approved for a bad credit car loan? Dealers that work with these lenders don't often advertise their ability to help get you financed when the chips are down, so it can be difficult to know where to turn.
Here at The Car Connection, however, we can help you get started in the right direction. With our dedicated network of special finance dealerships, getting the lending you need for your next vehicle can be hassle free. We'll work to match you with a dealer near you after you submit our secure auto loan request form.