Unless you live in a city where you can rely completely on public transportation, owning a car is a necessity. But buying a reliable vehicle doesn’t come cheap.
As of July 2022, the average price for a new car is $48,000 and the average price for a used car is $33,000. That kind of price tag is out of reach for most car buyers unless they can take out an auto loan.
How Can I Get a Car With Bad Credit and No Money Down?
Two things prevent most consumers from buying a new car. They either have bad credit, or they can’t afford a down payment. And for some consumers, it’s a combination of the two.
Fortunately, some lenders are willing to give auto loans to less creditworthy consumers. Here are the top five bad credit auto loans for consumers with no down payment.
Top 5 Bad Credit Auto Loans
Auto Credit Express
How it Works
Auto Credit Express is an online marketplace that connects you with more than 1,200 auto dealerships and lenders. These lenders offer auto financing on new and used cars to borrowers with bad credit. The company will even work with borrowers who have gone through bankruptcy.
You can use the company’s Auto Loan Estimator to see how much you can expect to be approved for. From there, you can apply online or over the phone.
Requirements
- Located in the U.S. or Canada
- Employed full-time with an income of at least $1,500 per month
- You have or can apply for auto insurance
- Have a working phone number
- Can show proof of residency
Advantages
Choosing Auto Credit Express automatically increases your odds of qualifying for a car loan simply because they work with so many lenders. Dealers in their network offer no-money-down car loans up to $35,000, and the company does allow cosigners.
Applying is quick and easy. And Auto Credit Express does a soft pull on your credit report so your credit score won’t be affected.
Disadvantages
If you have a slightly better credit score, you may save money by working with a credit union or bank instead. And while Auto Credit Express won’t do a hard pull on your credit, one of their lenders might.
Car.Loan.com
How it Works
Car.Loan.com is a lending marketplace that will match you with subprime lenders. They have no credit score requirements and are willing to work with subprime borrowers. You can buy, lease, or rent a new or used car through Car.Loan.com.
To get started, you’ll follow the company’s four-step process. First, you’ll apply online then the company will match you with a lender or dealership. Next, you’ll choose the car that best meets your needs, and once you’re approved, you can drive away in your new car.
Requirements
- You must be a U.S. citizen
- Borrowers must be employed full-time or have a guaranteed fixed income
- You must be at least 18 to apply
Advantages
Car.Loan.com offers bad credit car loans to subprime borrower even if they’ve gone through bankruptcy. And working with a lending marketplace will save you from applying with numerous lenders. And the company doesn’t put any mileage restrictions on the vehicle you purchase.
Disadvantages
Working with a lending marketplace like Car.Loan.com doesn’t necessarily mean you’re going to be offered the best deal. For example, you could receive interest rates as high as 25% as well as hefty dealership fees.
Carvana
How it Works
Carvana’s unique value proposition is that you can take out a loan, choose a vehicle, and buy a car all in one place. The company has a large selection of used cars you can choose from, and there is no minimum credit score to apply.
To get started, you’ll fill out a quick survey of what you’re looking for in a car. You can get pre-qualified for an auto loan in 2 minutes. Carvana will then match you to several vehicles.
Once you’ve chosen a vehicle, they’ll run a soft pull on your credit to preapprove you for an auto loan. Once you finalize the loan application, Carvana will do a hard pull on your credit.
Requirements
- Borrowers must be at least 18
- Have an annual income of at least $4,000
- No active bankruptcies
- The loan amount must be $1,000 or higher
Advantages
Carvana offers fast approval for borrowers with a poor credit history and no down payment. In addition, the online process is easy, and you could qualify for a car loan in as little as 48 hours.
Carvana’s customer service available seven days a week.
Disadvantages
Carvana has a maximum APR that is higher than other lenders. You can only finance vehicles sold through Carvana. Unfortunately, Carvana is not available to residents of Hawaii and Alaska.
myAutoloan
How it Works
When you apply for an auto loan with myAutoloan, you’ll receive quotes from multiple lenders who are willing to work with you. If you apply with a creditworthy cosigner, you’ll receive more favorable rates. Any loan offers you receive will last for up to 30 days. However, you’re not required to choose any offers you receive.
Requirements
- The vehicle can’t be more than 10 years old
- The maximum vehicle mileage is 125,000 miles
- You must have a minimum credit score of 500
- You must have an income of at least $1,800 per month
- Borrowers from Hawaii or Alaska aren’t eligible
Advantages
Unlike many of the online lenders on this list, myAutoloan.com shares information about their rates online. This means you can better understand what kind of auto loan you’ll qualify for before you apply.
And the company allows you to apply with a cosigner, so this is a good way for borrowers with bad credit to get a better interest rate.
Disadvantages
The company does have a minimum credit score, so if your credit score is below 500, you’ll need to choose a different option. And myAutoloan puts restrictions on the type of vehicle you’re able to purchase.
RoadLoans
How it Works
RoadLoans is an online lending platform that matches borrowers with bad credit scores to lenders who offer new and used car loans. The company works with more than 14,000 car dealerships nationwide.
You can apply online with RoadLoans in less than 10 minutes and receive a lending decision instantly. You’ll fill out the company’s one-page lending application and then receive offers from interested lenders.
Requirements
- Borrowers must be at least 18 to apply
- Lending isn’t available for borrowers in Alaska, Hawaii, Mississippi, Nevada, or New Hampshire
- You must have a minimum income of $1,800 per month
- The minimum loan amount is $5,000
Advantages
There are no credit requirements to apply for a car loan through RoadLoans. And the company may be a good choice if you were hoping to get a no-money-down car loan from a dealership. RoadLoans doesn’t charge any fees, and the application process is fairly straightforward.
Disadvantages
If you have less than average credit, you will likely end up with a high interest rate and fees. And RoadLoans won’t be an option for you if you live in one of the states they aren’t available in.
Summary
Thanks to these types of online marketplaces, borrowers looking for bad credit auto loans with no down payment have more lending options than ever. This means you don’t have to be limited by poor financial decisions you made in the past.
However, it’s important to know what you’re getting into before taking out an auto loan. Compare offers from multiple lenders and make sure you can afford to make the monthly payments. And most importantly, begin taking steps to improve your credit score.
