Can I Get An Auto Loan With Bad Credit?

Find out how to get an auto loan with bad credit.
An auto loan IS possible with bad credit

When you’ve got bad credit, it’s hard to catch a break. When you’ve got bad credit and you’re looking to buy a new vehicle, breaks can seem downright impossible. But, don’t worry, it IS possible to get an auto loan with bad credit.

The best case scenario is to wait to buy a vehicle until you’ve improve your credit score. Of course, this is only feasible if you can wait a year or two before you head to the dealership–and that you can pay all of your bills on time throughout the duration of that period.

So–if you can’t wait–what can you do?

Plan ahead

Just as you would before you make any big purchase, you’re going to want to snag a free copy of your credit report a couple months before you go to the dealer. For more on how to get a copy of your credit report, head on over here.

Since you’re most likely going to be paying a higher interest rate on your auto loan than someone who has a better credit score, you should try and set up your auto loan through your existing financial institution–especially if you’re a DCCU member–before you go looking elsewhere. Since they know you and your financial history, they’re going to be the most willing to approve your loan.

At the dealership

Bring identification and forms like pay stubs, utility bills and even references to prove that you can make monthly payments on your car loan.

Choose a car that’s priced lower than what you can afford. You will be faced with taxes and other fees that drive up your final price. Choosing a vehicle under your price range will lead to lower monthly payments, which means you can put more money towards your other bills and auto maintenance. 

Words of warning

  • Finalize the paperwork at the dealership before you take your new car home.
  • Don’t let the dealer talk you into buying extra services for your car, such as rustproofing, credit insurance and paint protection. These will more than likely raise your minimum monthly payment amount.
  • Try and take a shorter loan period so that you can grab a lower interest rate.

If your credit score isn’t in tip-top shape and you’re interested in buying a car–or you need further assistance checking your credit score–don’t hesitate to call us at 608-256-5665 or visit any DCCU branch location. We’re more than happy to sit down with you and see how we can help get you into a great vehicle and we’ll discuss steps for improving your credit score.


Published by

Tom S.

Tom is a 2006 graduate of UW Madison, currently residing in Verona with his wife and 2 girls. He has been passionate about writing ever since he was 15 years old, and displays that same enthusiasm in his work today. When he’s not sharing insightful financial wisdom, you can find Tom chilling on the Union Terrace, enjoying craft beer at the Great Dane, or hiking at Governor Nelson State Park. In the Fall he loves to take his family to Badger Football games!