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Bad Credit Car Loans: Who Are The Go To Guys?

Updated on May 15, 2011

Secondary Car Loans

With the recent economic down turn as people were losing jobs, many have also lost their credit and or ability to qualify for an automobile loan. Everyone might have a little different scenario when it comes to being able to qualify for a car loan after a bankruptcy or a major hit on your credit report due to losing a job, but being able to qualify for a car loan will more than likely throw you into the secondary market.

The secondary market when it comes to car loans means a couple of things: First of all, it means it’s harder to qualify for a loan. Secondly it means if you do qualify, your interest rates will be higher. It also means that you will be required to have documentation on things like your income (current paycheck stub), proof of residence and a current phone bill.

Assuming that you can prove your income (W-2 status with a current paycheck stub is the best way), and you have all the other required documents getting a loan in the secondary market should be fairly easy; although there are some variables that could knock you out of getting a loan even in the secondary market.

Here’s Two Different Scenarios: Which One Are You?

Scenario #1

So let’s look at two different scenarios: Let’s say that a couple years ago life was good. You had a good paying job, a house with a mortgage, a car with a loan, and some credit cards with balances. All a sudden, your good paying job was eliminated for one reason or another. The small savings account that you had (if you had any) will be gone in no time, and a financial hurricane is quickly moving on shore looking to obliterate your fortress.

After getting cash advances on your credit cards and then defaulting on them to try and keep your home, it’s only a matter of time until you lose everything. Your only option at this point is to declare a Chapter 7 Bankruptcy to wipe the slate clean so you’ll have a new start.

Assuming that you lost everything (cars, house, and credit cards), your position of being able to get a car loan right now is slim to nil. Also assuming that your bankruptcy has been discharged (if you’re still in a bankruptcy it’s almost impossible to get a car loan).

The Second Scenario

Scenario #2

Scenario #2 is pretty much like the first one with one exception…You lost everything except you were able to either file a bankruptcy and keep your vehicle meaning all your other credit is shot, but your vehicle wasn’t repossessed. Or maybe you were able to pay your car loan off before the s@*! hit the fan, and or you didn’t have a car loan at the time of your bankruptcy.

If your credit score was above 700 before you lost everything, it will probably be in the low 500 range, but if you didn’t have a repossession you’ll have a much easier time getting a car loan. In either scenario you’ll have to settle for a secondary car loan which is better than no loan at all if you need to get a vehicle and you don’t have cash.

Your Two Best Choices For A Secondary Car Loan

As a finance manager in a car dealership for several years, I came across two sources for the above scenarios. The first one is Road Loans and the second one is DriveTime. Again there are several variables that could affect getting a loan or not, but in my opinion if you fall in either of the above credit situations then go to either or

If you are unable to get a loan with either one of those two sources, then you’ll probably have to go to a car dealership that specializes in secondary credit and more than likely they will be able to help, just be prepared to pay an extra high interest rate. Good luck.

To read up on more new and used car buying tips and tricks visit my blog at


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