A car can be vital for many families, especially those who live in rural areas. Access to or ownership of a vehicle is also necessary for countless workers. If you need to buy a car or replace a broken or old model but have a bad credit rating, it’s important to know there are financing options available.

The good news is that it is possible to borrow money to buy a car even if you have a poor credit history. The main requirements are that you are between the ages of 21 and 80, that you are a homeowner and are employed.

Bad credit rating loans do attract higher APRs than loans available to people with good scores, but they are still a great way to finance your new vehicle. Here are a few tips before securing a loan:

  • Look out for loans that are flexible and will allow you to overpay if you can so you can clear your debt more quickly.
  • If you want to keep monthly repayments down, spread the loan over a longer period of time, but if your priority is to clear your debt more quickly then you can opt for a shorter term but you will have larger monthly repayments.
  • However you do it, make sure, so far as is reasonably possible, that you will be able to afford to make your loan payments, as failure to do so can have serious consequences.

Bad credit rating loans are generally more expensive, but the exact APR will depend on your recent credit history. It will be far lower for people who have not missed payments on their mortgage or credit cards in the last six months than for those who have missed a mortgage payment in the last three months.

Always use the helpful online loan calculators to work out your options and remember to take into account any fees that may be applied on your borrowing. Once you have secured your loan you can get on with purchasing your new vehicle.

Evolution Money has a more rounded approach to your finances. The company’s loan service can be tailored to suit your needs, taking into account any bad credit history. Evolution Money focuses on your current financial circumstances. The firm is interested in your ability to pay now, not whatever problems you had in the past.


  1. Eric J. Nisall - DollarVersity Reply

    Pretty much anyone can get a car loan (or any loan for that matter) if they are willing to pay the price. I hear radio spots all day long for financing offers as long as you have a checking account and make $400 a week on certain stations. While I believe that the past is the past, I also believe that certain issues are due to personality traits–with spending being one of them, so I always wonder why anyone would simply “give” a car to a person who not only will have difficulty making the payments based on income but also their past history of neglecting their financial responsibilities. Then I wonder how long it would take for some of these loans to be paid off and question why the dealerships wouldn’t just sell the car outright for a cheaper price and take advantage of having all that money now rather than possibly collecting on it later.

  2. Definitely try and get the best interest rate that you can. You might have to shop around a little more, but it’ll most likely be well worth it!

  3. Paul @ The Frugal Toad Reply

    I wouldn’t want to be in the situation where I would be financing a large purchase like a car with poor credit. I’ve worked hard to be in a position where I have a comfortable emergency fund and the only debt I have is a mortgage. I would be looking at the most economical form of transportation I could find and then focus on increasing my income and paying down the debt.

    • @Paul – I definitely agree. A used car or bike and public transportation is a better option until the person is in a better position to buy a vehicle.

  4. SB @ One Cent at a Time Reply

    I think you should not go for a new car with a bad credit. An used car is what I’d suggest people to go for. Car is a diminishing value asset, I’d not encourage people to take loan for it.

  5. This is my case. My wife’s car got broken and my old pick up truck is holding together because of the rust. My credit isn’t bad, actually it is quite good (750) but my debt is quite high and adding to it another loan could be too extensive to my budget. that’s the only reason why we hold back and try to fix the old cars rather than buy a newer one. But the repair costs are getting high.

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