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

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.

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.

That's why you put your teenagers as an authorized user at a young age so when they're in their twenties they have some kind of credit😊

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!

You guys make a good team. I am not in the market for a car but I love watching your videos.

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!

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?

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.

Thanks for making this video so quick!

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.😘

Best video on this topic I've been able to find. Thx

You should do an entire video on just "Buy Here, Pay Here" and how scummy they are.

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.

Great topic for those who need it.

Thank you for this very informative.

When Zach was getting approved for a home mortgage, he suffered from what is called "thin file syndrome" Because he did not have a long track record of on time repayment of debt, the bank issuing the mortgage did not have much data on which to base their decision. Beware of "thin file" syndrome.

Even if you get your car loan approved, the car insurance will make sure they fleece you on the insurance cost from having bad credit. Just get something you can pay in cash. That way you can customized your car insurance to something you can afford.

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

Very well said. Thank you both

Hey guys great info as usual and great channel. I would really like to see a start to finish overvue or walk through on how to buy a car. Research, trade in value, finance rate from bank or CU, are all obvious to do before going to the dealer. But once you arrive to test drive to negotiate to finance and closing what is the procedure ? Also whats the best way to buy a new or used car that is special or rarer? Say like Golf R,BMW M car or Some Subarus that have low inventory or limited numbers of dealers in an area?