How to Buy a Car with Bad (Subprime) Credit (Former Dealer Explains)

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Published 2020-08-11
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Today Ray and Zach discuss what you need to know if you plan to buy a car with not great credit. Buying an automobile with bad credit is not easy, and Ray walks you through what you need to know in order to secure a car loan with subprime credit.

If you like this video, please let us know in the comments below!

0:00 Introduction
1:22 What is "bad" credit
2:03 Cash down
3:15 Loans as a percent of MSRP
4:20 Please don't shop every dealer
4:50 Come with pay stubs
6:10 Utility bills & lease agreements
6:30 References
8:15 Credit Unions

All Comments (21)
  • @KPHVAC
    Back in 2013 I purchased a certified used 2010 Honda Accord with a 550 credit score. My income was good and I put $5,000 down on a $22,000 car. That was the out the door price. I got a 7% or 8% interest rate. Having over 20% down was the saving grace that got me the car at a reasonable rate. I still have my Honda Accord now and it has over 150,000 miles and still runs great. My advice, buy a 3 year old Honda or Toyota and put as much down as you can. Pay it off early and enjoy it for 10 to 15 years.
  • @barrios2293
    That’s what’s wrong with this country. A car is necessity but they will let a college student go into debt with 50 to 60 K student loans but won’t let someone get a $30,000 car loan… doesn’t make sense.
  • @philpaule472
    You guys make a good team. I am not in the market for a car but I love watching your videos.
  • Hello, Ray and Zack.
    Zack, the personal experience you shared with us was very interesting. I had to get my first auto loan in 2018 from a Credit Union called Mountain America with a credit score of 550 due to the fact I was new to the country but no prior bad credit history. The bank offered 3% interest with the condition of a co signer. I used my brother’s help who had 790 but the Bank said he doesn’t exist as he doesn’t have any revolving accounts such credit card or other loans.
    Finally, got the approval and it’s a good beginning of a long journey of building my credit!
  • @jhoulder44
    Best video on this topic I've been able to find. Thx
  • @peneueta7
    Thank you for this very informative.
  • @MarkM58
    I was an F&I manager in a Mercedes dealership back when they were still tied to Chrysler in the early 2000's. Back then, Chrysler Credit would finance anyone. We had dreggs coming in with 520 scores and driving out in a new Mercedes with a 7-year balloon payment loan!
  • @miken2686
    Gents, first off I have to say I thoroughly enjoy the content of your videos, but more so the way you interact with each other. I'm in MD and my parents live in SC and I especially miss him after watching your videos.

    Apologies if you've covered this in another video, but may I ask why you're no longer taking clients?
  • @formyitr
    Great information !!!! I went with my credit union and had a very low APR and monthly payments BUT !!!!!! I forgot to ask and also didnt find out until i was almost finished paying it off that they had just started reporting to the credit bureau the month before SMH !!!! Any payments before that didnt count towards what they reported
  • @imambaybars3405
    I saw a car dealership online yesterday that was advertising they were giving financing to people on unemployment, with the current economy pretty soon (proof of unemployment) would be a requirement for loans and rentals.
  • @carrietoo
    Really good discussion. I love my credit union.
  • @cybercruiser69
    Another option is to get a cosigner, if you can get someone to cosign for/with you. Of course, the cosigner must have better credit.
  • @marksanders60
    You should do an entire video on just "Buy Here, Pay Here" and how scummy they are.
  • When Zach mentioned that he did not exist because he had not ever borrowed money off and it reminded me of a friend. This was 40 years ago and she inherited nine figures. She had never bought anything on credit because she had the cash for about anything. But she decided that she needed a credit card for traveling so she had a heckuva time getting a credit card issued to her.😘