Yes, special financing can be used to buy a new car. However, whether or not you qualify for a special financing auto loan for a brand new vehicle depends on your situation and your budget.
Yes, special financing can be used to buy a new car. However, whether or not you qualify for a special financing auto loan for a brand new vehicle depends on your situation and your budget.
Special financing is an umbrella term for auto loans issued by bad credit auto lenders. Bad credit lenders are either subprime lenders that are signed up with special financing dealerships or buy here pay here (BHPH) dealers that use in-house financing.
While it’s possible to get approved for a brand new car loan by a subprime lender, BHPH dealers only sell used cars. If you’re on the hunt for a brand new vehicle with poor credit, a subprime auto loan through a special finance dealership is worth a try.
Buying a new car with special financing is possible through a subprime lender, but your available income largely determines the size of the loan you qualify for. The more income you bring in each month, and the more disposable income you have available, the more likely you are to qualify for a loan large enough to finance a new vehicle.
Subprime lenders vary in requirements, but there are a few common stipulations you’re likely to come across:
You may need to meet more or less requirements for a subprime lender to determine your eligibility for a car loan. Remember that if you’re aiming for a brand new vehicle, your income and payment to income requirements may be higher than if you were to go for a used car.
There are no definitive odds of getting approved for an auto loan on a new vehicle. New cars can be very expensive – averaging around $40,000. It also depends on the type of vehicle you want to buy. Brand new trucks and SUVs can be really pricey, and depending on your income and your overall credit history, it could be tough to land an approval.
As a bad credit borrower, you're likely to have higher odds of getting approved for financing on a used car simply because the loan amounts tend to be lower. It may also be worth considering a certified pre-owned (CPO) car. These vehicles are on the newer side, and come with limited mileage, usually only one previous owner, and many are fresh off lease. They’re typically more expensive than a regular used vehicle, but they also come with some manufacturer-backed warranty coverage and could be a good middle ground between used and new.
Even when you know what special finance entails, it’s not always easy to find a dealership that’s signed up with subprime lenders. Here at Auto Credit Express, we want to help you get in touch with dealers that are equipped to handle many unique credit situations – at no cost to you.
With our nationwide network of special finance dealerships, we’ll look for a dealer in your local area once you complete our free auto loan request form. There's never any obligation and it only takes a few minutes, so get started today!
Senior Auto Financing Editor
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