A sub-600 credit score doesn't disqualify you from getting an auto loan, but it dramatically changes the landscape — both the lenders willing to work with you and the cars worth buying. Subprime auto lending is a real market with real options, but it's also where some of the most predatory lending in consumer finance happens. Knowing the difference matters.
Lenders that approve sub-600 credit
Capital One Auto Finance — Pre-qualification with soft pull. Will approve scores in the 500s with documented income. Rates 8–22%. Available at most franchise dealerships.
Carvana — Online used-car retailer with in-house financing. Approves credit scores starting around 525. Rates 8–25%.
OneMain Financial — Established subprime lender. Approves scores below 500 in some cases. Rates 12–35%. Both new and used.
Westlake Financial — Specializes in subprime auto financing through dealer network. Will approve damaged credit. Rates 15–28%.
Local credit unions — Often overlooked. Many will approve sub-600 borrowers at rates 5–8 percentage points below specialty subprime lenders. Worth checking before applying elsewhere.
What rates you should expect
| FICO | New car APR | Used car APR |
|---|---|---|
| 580–599 | 14% – 18% | 17% – 22% |
| 540–579 | 17% – 22% | 20% – 27% |
| 500–539 | 20% – 28% | 23% – 32% |
| Below 500 | Limited options | 26%+ |
Critical decisions that affect total cost
Buy used. A 3–5 year old car with documented service history is dramatically better value than new for subprime borrowers. New cars depreciate 20–30% in the first year, which means you'll be underwater on the loan for 2–4 years.
Choose a shorter term. 84-month auto loans are everywhere now and they're a disaster for subprime borrowers. You'll pay massively more in interest and stay underwater for 5+ years. Cap at 60 months if at all possible.
Put down at least 10%. Even a small down payment dramatically reduces the lender's risk and gets you better rates. It also reduces the chances of being underwater on the loan.
Get pre-approved before going to the dealership. Walking in with a pre-approved rate flips the dynamic. The dealer can still try to beat your rate (sometimes successfully), but you have a baseline.
Avoid buy-here-pay-here lots unless you have no other option. BHPH dealers finance their own inventory at high rates and often sell vehicles for substantially above market value. You're better off at a franchise dealership with subprime financing through a third-party lender.
The buy-here-pay-here trap
Buy-here-pay-here lots advertise to subprime borrowers with promises of "no credit check" or "guaranteed approval." The economics work like this: they sell a vehicle for substantially more than its fair market value, finance it themselves at 25–30% APR, and structure payments such that they recoup the entire cost of the vehicle within 18 months. If you miss a payment, they repossess and sell the same vehicle to the next subprime customer.
The result: you pay $18,000 for a $9,000 car, financed at high rates, with no underwriting flexibility. Avoid unless every other option has been exhausted.
The path forward
If you're buying out of necessity, take the loan you can get on the cheapest reliable used car you can find, at the shortest term you can afford. Then refinance in 12–18 months as your credit improves. Subprime auto loans typically can be refinanced once you've made 12 months of on-time payments and your score has recovered to 620+.
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Frequently asked questions
Can I get a car loan with a 500 credit score?
Yes, through specialty subprime lenders like Westlake Financial and OneMain. Rates will be 20–30%. Strongly consider a used vehicle and a 10%+ down payment.
Should I buy a new or used car with bad credit?
Used. The depreciation hit on new cars combined with high subprime rates leaves you deeply underwater for years.
Will a co-signer help my auto loan?
Significantly. A co-signer with prime credit can drop your rate by 5–10 percentage points. The co-signer is fully liable if you default.
How fast can I refinance an auto loan?
Most lenders allow refinancing after 6–12 months of on-time payments. Refinancing typically saves the most when your credit has improved by 60+ points or when prevailing rates have dropped.