Bad Credit Car Dealerships (What You Need to Know)

Start Your Approval Now
Your Approved Certificate on phone.
Shopping for a Car with Bad Credit

Just about everyone needs financing to buy a car. If your credit is weak or limited, consider turning to a bad credit car dealership.

Before you apply for a loan, it's very helpful to know your credit score. This is available for free from, the only site authorized by the US Government to provide credit reports.

Bad credit used car dealer website services

Many bad credit car dealers have websites that list cars, offer online loan applications, and process car payments.

  • Many buyers use online credit services to determine the loan amount and terms for which they qualify before they shop for a car. (This can also be done over the phone or onsite at a bad credit car lot during business hours.)
  • Once approved, you can begin looking over available cars.
  • Many bad credit car lots and bad credit used car dealers accept payments through their websites. This is a good way to make sure your payment is processed on time.
How do bad credit car dealers decide whether to offer a loan?

A bad credit used car dealership may look at:

  • A credit check
  • How long a prospective buyer has been employed
  • How long the buyer has lived at their current address

Depending on these findings, a prospective buyer could consider these options for getting a bad credit auto loan:

  • Pay a higher interest rate
  • Provide a larger down payment
  • Get someone with stronger credit, such as a parent or spouse, to cosign the loan
10 Questions to Ask Your Car Dealer about Financing with Bad Credit

If you think that financing at a bad credit car lot is scary or complicated, you're wrong. In fact, it's much easier than you think. Asking the right questions, like the 10 questions below, at a bad credit car dealer lets you know what you're getting into.

  1. What type of cars am I qualified for at a bad credit used car dealer?
  2. How high is my interest rate?
  3. Are there any potential penalties to my loan?
  4. What is the total amount being financed?
  5. How many payments will I be making, and what is the exact amount of each one?
  6. Is there credit insurance, and do I need it?
  7. If I need credit insurance, do you offer it? If not, can you recommend one?
  8. Can I still get a vehicle without a down payment?
  9. Who is the actual lender and am I guaranteed the rate I'm being quoted?
  10. What is the actual price I'm paying for the car? Does that include interest paid?

Remember to write down the answers while you are at the bad credit car lot so you can remember what the dealer says. If any of the answers that they say seem vague or confusing, take some time to think about it or ask to speak to a manager to get some confirmation. It's best to shop around and find the best financing options for your credit situation.

Getting a Good Deal at a Bad Credit Car Dealer

Having bad credit can limit your options when it comes to financing a car, but it doesn’t necessarily mean that you’re resigned to terms that will blow your budget. There are ways that you can still snag a good deal on a used car. Here are some things to consider before planning your purchase:

Check your credit

Just because you think your credit is bad doesn’t necessarily mean it is. Many people end up at bad credit car dealerships just because they think their credit is worse than it actually is. Do yourself a favor and get copies of your credit reports before you step foot on the dealership floor.

It’s important for you to know what's on your credit file and make sure that all of the information is correct before making a buying decision. In some cases, you might find mistakes on your credit reports that, if fixed, could potentially boost your scores.

If your credit score isn’t where you want it to be, you may also choose to delay your purchase and focus on improving your credit. Instead of being limited to the offerings of a bad credit used car dealer, consider holding off on until you have improved your scores and possibly qualify for more favorable lending terms.

Make a large down payment

If your goal is to make your payments more affordable, you should consider putting down a large down payment when you finance. This will not only lower your monthly payments, but it might also qualify you for a more favorable interest rate from your lender.

Bad Credit Financing Options at Car Dealers

Car dealerships that offer in-house financing to borrowers with bad credit or no credit are called bad credit car dealerships. Bad credit car lots often have many more financing options than other lenders, making them attractive for people shopping for bad credit auto financing.

Bad credit car dealers have some similarities to other lenders. In a negotiation with a bad credit car dealership, for example, you'll be talking about loan terms such as the length of the loan, the amount of your down payment, and the interest rate. Putting up a large down payment can help you in bargaining for a lower rate or a longer loan length, because this means the bad credit car dealer takes less of a risk in lending to you.

Choosing a bad credit car dealer for financing may also have benefits if they can offer incentives that other types of financing institutions can't, such as flexible interest rates, extended warranties, increased services on your vehicle, and a quicker in-store process to get you on the road in your next car.

All information provided on this site is for informational purposes only and may have come from other sources. DriveTime makes no representations as to its’ accuracy or validity, and it is provided on an as-is basis.
Download Our App