How to Buy a Car from a Bad Credit Car Dealership

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When you need to buy a vehicle, but your credit isn’t in the best shape, it can be intimidating to walk into a dealership.

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Bad credit no money down car dealerships near me

They are in nearly every mid-sized to large city, so finding bad credit car dealers isn’t much of a challenge. They typically advertise heavily and may make promises that seem too good to be true.

Remember, with bad credit car dealers, there’s always a catch. The trick is to figure out whether you can live with their terms.

Buy Here Pay Here dealerships handle all financing in house. Unlike other dealerships, they don’t offer to help you find outside financing from online lenders, banks, or credit unions.

They may offer to finance anyone with a steady paycheck, proof of solid income, or a sizable down payment regardless of credit history.

You’ll have to choose from their inventory, of course. Cars at a Buy Here Pay Here lot are typically older and have high miles. If you are shopping one of these dealerships, be sure to have your regular mechanic check out the car before you sign any paperwork.

Also, be aware that repair bills on older cars can add up fast. You don’t want to end up with a car that has a high monthly payment and also requires expensive repairs.
Best place to find local dealerships is Google Places. Search for example “car dealerships Dallas”.

Unsecured loans with no money down

This option is often better for the borrower than relying on local car dealerships offering deals for people with bad credit and no money to put down on their vehicle purchase. You can use the money for a vehicle for sale at any car dealership or buy from a private seller.

Up to $35,000
Starting at 6.90%
Bad credit
Loan Terms
2 months to 7 years
Use car as collateral
Up to $35,000
Starting at 5.99%
Bad credit
Loan Terms
3 months to 6 years
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This type of installment loan offers an interest rate that doesn’t change throughout the life of the loan. Borrowers also make the same payment each month, so it’s easy to work into a budget.

Unsecured loans with no money down are a viable option for people with bad credit who need to buy a car. If your FICO credit score is low, you have past repossessions, judgements, a bankruptcy, charged-off accounts, or a lot of late payments, getting a traditional car loan with great interest rates may not be an option.

Used car dealerships – no credit check

This type of financing may be expensive and risky. Lenders at these dealerships use alternative criteria like income and down payment amount to qualify applicants. They may require a weekly automatic debit of the account where your paycheck is deposited making the car payment the first bill you pay.

Bad credit car dealers are also more likely to charge prepayment penalties on their loans. This means that even if your credit score improves and you are eligible to refinance the loan, you’ll still have to pay 100% of the interest charges for the life of the loan, no matter when you pay the balance in full.

Car dealerships for bad credit with no money down

When a car dealership offers bad credit auto loans with no money down, they are balancing their risk in a way that doesn’t involve relying on past credit history or a sizable down payment.
For the borrower, this means high interest rates. Every state has laws about the maximum amount of interest a car dealership can legally charge consumers. In many cases, car dealerships specializing in bad credit charge the maximum interest rate allowable by law.

They may also charge origination fees. This is a percentage of the total amount of the loan. So, if you have a $15,000 loan with a 2% origination fee and the dealership adds the fee to the loan, you’ll actually pay $18,000 plus interest.

“No money down” means they’ll simply add the $3,000 origination fee to your loan principal. So, you still won’t have to put any money down, but you’ll pay much more for access to the funds.