CarsDirect is a central hub for both car dealerships and auto loan lenders. Rather than shop around at four or five dealerships and finding the one with the best price for the car you want, simply go to CarsDirect and find the lowest dealer price nationwide.
Also, need a loan? Similarly, rather than rate shop at a handful of different lenders, find the lender with the lowest rates with just a click of the button.
Don’t think of CarsDirect as simply a liaison. Think of CarsDirect as a bustling marketplace where all of the best vendors compete for your business.
CarsDirect Loan Application Requirements
You don’t need a high credit score to buy a car through CarsDirect because they are not an actual lender. They take your submitted information and find lenders that would be a good fit for you, regardless of where your credit score falls. So, as far as a minimum credit score goes, that all depends on the lender. There is always a lender out there willing to work with you and your financials.
The necessary paperwork will all depend on the lender you choose, your credit score and credit history. Each lender has different requirements, and if your credit history is limited, you may be asked to submit alternative credit histories. These may include things like rent and utility payment histories.
If you know your credit rating, here’s how auto loan lenders sort scores with their corresponding rates. This is specific to the auto industry, so the ranges may look a little different than what you’re used to seeing with other types of loans.
5 Tier: F Credit
For credit borrowers with a score between 250 and 520, this subprime tier is for people with either a poor or non-existent credit history. For this category, there are bad credit loan specialists out there who can qualify you for a car loan with a manageable rate.
4 Tier: D Credit
Borrowers with a score between 520 and 580 will qualify for a bronze-level loan. This tier is for borrowers who have both good and bad credit history — meaning they have a few things hurting their score, but still an effort to manage and stay on top of their financial affairs can be seen.
3 Tier: C Credit
Credit scores between 581 and 659 fall in the silver rank of auto loans. People in this rank usually have less than 5 years of credit history under their belts, are slow to pay off credit card balances, or may be close to maxing out an account.
2 Tier: B Credit
A 2 tier, gold borrower has a credit rating between 660 and 699. Borrowers with this rating may be slow to pay off credit card balances or have some cards that are over 50% of the credit limit. If you’re close to tier A, consider paying off your balances because the interest difference between tier 2 and tier 1 can be as much as 4%.
1 Tier: A or A+ Credit
If your credit score is between 700 and 739, you have an A credit rating. If it is between 740 and 877, you’re an A+. If you have an A+ rating, you can often get the best rates with little to no money down.
Standard Required Paperwork
No matter who you choose to work with, standard paperwork will include things like:
- A copy of your photo ID
- W2 forms
- Two years of tax history
- Bank statements
- Most recent pay stubs for the past 30 days
- Proof of residence
- Proof of insurance
Types of Auto Loans Available
The type of car loan you’ll be offered will all depend on your credit score, debt-to-income ratio, and income. CarsDirect is not a lender, so there’s not a static list of car loans its customers take out. This is a good thing because it means your loan options aren’t limited to a select few.
On their website is a ‘Car Loan Calculator’ that tells you how much car you can afford, which in turn will help CarsDirect ‘direct’ you to the right lender. The information you’ll need to enter includes:
- Desired Monthly Payment
- Expected Down Payment
- Approximate Credit Rating
- Loan/ Lease Term (how long you want to make payments)
- Car Sales Tax (this varies state by state)
When calculating desired monthly payment, financial experts suggest your monthly payments not exceed 10% of your monthly gross income (the amount you make before anything is taken out). This 10% should include everything — principal, interest, and insurance.
New and Used Car Loans
Buy either a used or new car through CarsDirect, then match up with the right lender for you. Just know that rates are higher for used car loans because borrowers buying a used car tend to have lower credit scores. Lenders offset this risk by charging higher interest rates on lower loan amounts.
Private Party Purchase Loans
If you choose to finance through a lender not affiliated with a dealership loan finance company, you can easily do so through CarsDirect. Loan approval typically happens within 24 to 48 hours, and you can apply with a minimum of a 620 credit score. You’ll need to provide income, employment, and residency verification, but once you do the loan process is relatively hassle-free.
Once you have made either 6 to 12 months of on-time payments, you may be eligible to refinance your auto loan. CarsDirect has partnered with RateGenius, an online broker that reportedly is able to save its customers about $81 a month and reduce their interest rates by an average of 5.15%.
If you’re unhappy with both your monthly payment and interest amounts, and you have a history of on-time payments, refinancing through CarsDirect may be able to save you money.
Lease Buyout Loans
Depending on what lender you choose through CarsDirect, your lender may offer you a buyout loan. A buyout loan is when the lender pays the remaining balance for the borrower, and the borrower from then on will make monthly payments on the buyout amount. When the loan is fully paid off, the borrower then completely owns the car.
Fees and Rates
CarsDirect doesn’t charge any fees. However, that doesn’t mean you won’t be charged anything else other than monthly payments. It all depends on the lender you choose and what state you live in (because each state has different car sales tax rates).
Fees you’ll want to keep in mind when purchasing a car include:
- Vehicle Titling Fees
- Registration Fees
- License Fees
- Documentation Fees (charged by the dealership, and amounts will vary)
CarsDirect Application Process
Applying is easy with CarsDirect. Simply submit the required paperwork and start shopping. Once you’ve found your car, they have what they call the “60 Second Loan Request.” This online form enables borrowers to find out whether they’re likely to get approved for their desired loan amount in a minute or less.
CarsDirect continuously updates both its listings and prices in real-time. When you choose what you want, you’ll get updates on both new listings and price changes. You can also be hyper-specific as to what you want, meaning you can even state what color you want your future car to be.
Another great tool is a search feature that brings up cars by monthly payments. If you’re not too picky, just tell them how much you want to spend per month and browse from there. This way you may find affordable cars that you thought were completely out of your price range.
CarsDirect is a great place to learn what your options are during the car buying process. Saying they take the guessing part of purchasing is almost sounds like a cliché, but for them, it’s really true. With CarsDirect, you don’t have to wonder whether you made the right purchase because you’ll know that you got the best deal for your money.
Check out our other auto loan reviews below to continue exploring your options.