How to Get Your Car Financed with Less-Than-Perfect Credit

How to Get Your Car Financed with Less-Than-Perfect Credit
  • Opening Intro -

    Buying a car while you have a blemished credit history is not an impossible task in 2017.

    For the most part, the major players of the auto lending industry prefer doing business with individuals whose credit histories are perfect because of what financial analysts call the "low-hanging fruit" effect.


What this means is that big banks and major auto loan providers are more interested in making Wall Street investors happy than helping prospective buyers with less than perfect credit.

Many people took a hit on their credit backgrounds when they lost their jobs during the global financial crisis of 2008. If you are one of these unfortunate individuals, or if your credit score is not good enough for traditional lenders, you should try the following methods.

Try Specialty Lenders

Many banks and auto financing companies insist that you fill out applications at the dealership or through the websites affiliated with the dealers. Specialty lenders will not force you into applying with dealers; they directly help buyers who do not have high FICO scores without forcing them to visit dealerships. Companies such as BlueSky Auto Finance issue approval certificates that can be used at any dealership. Specialty lenders can be a great option for those with credit issues.

Refinance an Existing Loan

If you wish to take a break on your current car loan obligations, try to get the debt refinanced. Even if your credit is not the best, the repayment of a refinanced loan will significantly boost your credit. You can also use the money saved from hopefully reduced rates to pay off existing and overdue debt to help repair that credit score.

Save Your Cash

If you have been setting aside money from every paycheck while looking at used car listings, you should not rush into buying a clunker. Flashing cash is a good method to get the attention of credit managers at car dealerships. Here’s what you need to know about dealership operations: they need to create a certain cash flow because they are always waiting on the lenders to wire funds.

This means that if someone with perfect credit buys a new Ford Fusion with zero down payment, the dealer will have to wait for the bank to send them cash; in the meantime, they would like to have some funds to cover their operational expenses. In other words, showing up at the dealership with $2,000 in your pocket could prove irresistible to credit managers.

Try Dealer Financing

Used car dealerships are often willing to offer financing options to buyers with any kind of credit. Similar to the step above, you can go to the lot with some cash to get them excited and motivated to move their inventory.

In the end, spotty credit does not mean you will never drive a car again. Try one of the methods above the next time you are shopping for a new or used car.

Consumer Financing reference:

about auto financing

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Last update on 2020-03-19 / Affiliate links / Images from Amazon Product Advertising API


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