When you have bad credit and you need a cosigner to qualify for a subprime auto loan, you can often get financed without one through a BHPH dealer. BHPH dealerships are in-house lenders, which means you buy the vehicle and get financing all in one place – sometimes even on the same day.
Can I get a car loan with a 500 credit score?
It’s possible to get a car loan with a credit score of 500, but it’ll cost you. People with credit scores of 500 or lower received an average rate of 13.97% for new-car loans and 20.67% for used-car loans in the second quarter of 2020, according to the Experian State of the Automotive Finance Market report.
That’s a big difference from the loan rates for people with credit scores of 661 to 780 (considered prime) — they received average rates of 4.21% for new-car loans and 6.05% for used-car loans.
Getting a car loan with a credit score of 500 could be tough, too. The Experian report shows that only 0.37% of new-car loans and 4.35% of used-car loans issued in the fourth quarter of 2019 went to people with credit scores of 500 or lower.
Best car loans for bad credit
Here are some of our picks for lenders that offer car loans for bad credit.
Good for interest rate discounts: New Roads
New Roads offers interest rate discounts on certain pre-owned and new car models that could reduce your overall interest payments. And if you’re struggling to come up with a down payment, it’s good to know that New Roads doesn’t require one.
