5 Ways to Finance a Car With Bad Credit

Whether you have fair or bad credit, you cannot run out of options to finance a good, new vehicle. Most lenders will go out of their way to create a plan that will suit your current credit state and repayment ability. Thus, it would be best not to get stuck driving an unreliable broken car.

You only need to do your homework and know what options are available. That’s not to say financing a car with bad credit will be easy. For instance, you could pay higher interest, but it’s better than not having a car, especially if you live in a city without reliable public transportation.

Now there are a few things to know before you head on to a car dealership. They include the various ways you can finance a car even with your poor credit history. This article will provide the five ways to access car financing with a bad credit record.

Let’s get into it.

1. Save for a Down Payment

One way to get a good auto loan is to save for a down payment. Paying part of your loan reduces the amount you’ll owe the lender after financing your car. This, in turn, will increase the lender’s confidence in you, making it easier to get the exact type of car you need.

But then, you need to have a target when saving for your down payment. The best way to do it is to visit a car dealership company that’s near you. Check out the cars they have, and find out how much you’ll need to pay to get the exact vehicle you’re looking to finance.

For instance, if looking for a Toyota car, you can walk into a Florida Toyota dealership. After knowing how much the vehicle would cost, save up to 20% of its value as a down payment. This will be enough to convince the most reliable lenders to finance your car.

In addition, paying up to 20% of the car’s value significantly reduces your monthly payments. It will also help you reduce your interest rates, making the auto loan worth every penny.

2. Consider Online Lenders

Another way that works well with bad credit is financing through an online lender. Working with online lenders means there may be nobody to oversee the process physically. This, however, doesn’t mean they do not have instruments to check and verify that you’re worth lending to.

But then, they may not be as strict as your local bank when approving your application. It is even possible to find an online lender who targets borrowers with bad credit. All you’ll need to do is send them your details online and wait to get approved and your loan disbursed.

Most people prefer not to work with online lenders because of their high-interest rates. However, the reality is that their interest rates are mostly relatively lower than the rates of most lenders. It will also help avoid damaging your credit record with multiple credit checks.

The best way to avoid that is by dedicating a month to shop for car loans. That means you won’t spread your credit inquiries and further hurt your record. Thankfully, most online lenders have near-instant approval processes, so a month will be enough to shop for a good offer.

3. Spread Out Your Loan Applications Over Time

Getting financing for a car from a Toyota dealership Tampa Florida with bad credit can be a daunting task. Thus, it would be best to avoid hurting your credit record further by failing to get approved by many lenders in a short period.

Your credit record will get affected if you get several rejections within a short period. That’s why it is essential to make this a month-long process. You can even dedicate more time to it but ensure your credit inquiries do not exceed a reasonable number.

In short, you keep your credit record at the same state when you spread your applications. It makes it easier to improve your record if you can try and catch up on any missed payments. In the end, you increase the chances of getting your desired vehicle from a dealership company Bay Area.

4. Consider a Joint Application

Another way to consider is jointly applying with someone with a better credit record. This is almost similar to the consigner option we’ll discuss next. The person you choose as a joint applicant needs to meet the requirements set by the lender before getting approved.

You can apply jointly with your partner, spouse, or anyone else close to you. It can even be someone at your address if they’re willing to offer a helping hand. There’s a better chance of getting approved for the loan when you apply with someone who has a good record.

As mentioned, there’s not much difference between this and the consignor option. It can help build trust with the lender. All you’ll need to do is walk in with the other party and have your application processed; after that, head on to a Toyota dealership Brandon FL to get your car.

5. Get a Cosigner for Your Loan

Another way to increase a lender’s confidence in you is by getting a consigner. Most people treat this as the last option when everything else fails. A consigner, to be precise, is a financial intermediary who helps facilitate your access to an auto loan when you have bad credit.

In short, the cosigner signs an agreement to repay the loan if you default. This makes it one of the best alternatives to consider when you cannot convince the lender that you’ll pay. A cosigned loan comes with better rates and lower monthly repayments.

But then, there are a few factors to keep when getting a cosigned loan. First, the consignee must have a better credit record and meet the lender’s requirements. It will be easier to get financed for a car from a dealership company Bay Area if the consigner qualifies.

Secondly, the consignor’s credit record will get affected if you both fail to pay the loan. Thus, defaulting could affect your relationship with the consignor. This is one of the reasons to consider this option as the last resort should you fail to secure a loan in any other way.


Everything falls in disarray when someone doesn’t have a car. As mentioned earlier, this is unless they stay in a place with an excellent and dependable public transportation system. Don’t shy off from reaching out to lenders to finance you in a car dealership if you have bad credit.

If an auto loan is the only option left, go for it. We already mentioned that lenders would work hard to find what will work for you. However, you’ll need to invest time into research, especially to avoid getting entangled in a contract with an exploitative lender.

After finding a reliable lender, let them know how you plan to make it a win-win situation. Tell them you can make a down payment for your loan if you have some savings. You could suggest getting a cosigner for the loan to increase their confidence in you despite your bad record.

Other alternatives include looking to get financed for a used car. Various used car dealers are available, so you won’t have a problem getting a good car. Also, you can rent a car from a Toyota car rental to help you move around as you wait for the approval of your application.

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