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Learn how to finance a preowned vehicle.

When you buy a new car, it loses 20% of the value the moment you drive it off the lot. Buying a used car can help you save money in monthly repayments and fee. And when you buy a preowned car, you have more room to negotiate on the price. But Car Loans

Our top pick: Car Loans

Get matched with a local car dealership to finance your car purchase. Bad credit, no credit OK.

  • Specializing in 'buy here, pay here' car loans. No banks or credit unions.
  • Typically hear back from a rep within 24 hours.
  • Free loan-matching service. No obligation offers.

    Compare car loans for used cars

    Rates last updated March 19th, 2019

    Reveal your potential loan offers and rates

    Answer two quick questions to filter the loan offers and get the best one for you.

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    Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
    Name Product Product Description Min. Credit Score Term of Loan Requirements Car Loans
    Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
    Varies by lender
    Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
    Auto Credit Express Car Loans
    Get connected with an auto lender near you, even if you have bad credit.
    Typically 3 to 6 years
    Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
    LightStream Auto Loans
    Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
    Good to excellent credit
    Flexible terms
    Good or excellent credit, enough income or assets to afford a new loan, US citizen or permanent resident, 18+ years old
    LendingClub Auto Refinancing
    Lower your monthly car payments and save on interest through a fast and easy online application process.
    Fair or better credit
    Minimum of 2 years
    Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
    RateGenius Auto Loan Refinance
    Connect with a network of over 150 lenders to refinance your car loan.
    Income of $2,000+/month, vehicle has less than 150,000 miles and is no older than 8 years, loan balance is between $10,000 and $100,000, debt-to-income ratio is less than 50%
    LendingTree Auto Loans
    Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
    Good to excellent credit
    Typically 1 to 7 years
    Must be a US citizen and 18+ years old. Must have good to excellent credit.

    Compare up to 4 providers

    4 ways to finance a used car

    You have several options when it comes to loan for a used car. Some of these include:

    • Secured car loan. Most car loans are secured car loans, which car as collateral. It can help you qualify for a competitive rate though you risk losing your car if you default.
    • Unsecured personal loan. Unsecured personal loans are generally offered to customers with good credit. These loans don’t require you to offer your car as collateral for the loan, but can results in higher interest rates and additional fees.
    • Home equity finance. Home equity financing is another option that allows a homeowner to borrow against the equity value of their home. This option can be risky because you’re putting your house up as collateral.
    • Dealer finance. Nearly every dealership you walk into will offer in-house or third-party financing to assist you in buying a car.

    What are the limits on used car loans?

    Lenders typically set minimum and maximum loan amounts, as well as limits to the age of and mileage on a vehicle. Here’s what you can expect from some top car loan providers.

    Loan ProviderMax. age of carMinimum loan amountMaximum loan amount
    Auto Credit ExpressNoneVaries by lenderVaries by lender
    car.Loan.comVaries by lenderVaries by lenderVaries by lender
    myAutoloan.com10 years old$7,500$100,000
    LendingTreeVaries by lenderVaries by lenderVaries by lender
    CarsDirectVaries by lenderVaries by lenderVaries by lender
    Springboardauto8 years old$7,500$45,000
    Bluesky Auto Finance8 years oldN/A$30,000
    CarFinance.com8 years old$7,500$45,000

    Should I put a deposit on a used car?

    Some lenders might request a deposit in three situations:

    • If you don’t have financing available after you negotiate the purchase price.
    • If the dealer needs to order your vehicle from a factory.
    • If the dealer you’re working with needs to exchange vehicles with another dealer get your car.

    In any of these cases, it may be necessary to leave a deposit for your used car, but that doesn’t mean you have to settle for the dealer’s terms. Every step of a car purchase can be negotiated, and that includes your deposit.

    Tips for making a deposit on a used car

    • Make sure it’s refundable. Read the terms of your contract carefully and have a sales manager change it if you find that it’s nonrefundable. That way you can back out if you don’t have financing on hand right away or haven’t had the car inspected.
    • Make sure it’s not listed as a partial payment. Deposits should never be listed on your contract as partial payments — it’s not a down payment on your car.
    • Pay with a credit card. You can easily dispute the charge with your credit card company if you decide to not go through with the sale.

    What are the pros and cons of using a car loan to buy a used car?

    • You don’t need the full amount to buy the car.
    • Loans help you build credit.
    • Compared to leasing a car, taking out a loan helps you build ownership of your car.
    • You can get a great price on a used car by negotiating in a private sale or at a dealership.
    • You have various financing options to consider — both secured and unsecured.
    • Could pay a high monthly payment with high interest rates.
    • Used car financing can be more expensive and restrictive than financing for new cars.
    • You could be buying a car with lots of problems.
    • The age of the used car affects its resale value.

    3 steps to comparing your auto finance options

    Securing the right finance is as important as finding the right car. Some car loan terms extend up to seven years, so it’s quite a commitment. Here’s what to look for when looking for the right financing:

    1. Interest rate. The first thing to consider is your lenders interest rates. Compare your options to find the most competitively priced and packaged loan.
    2. Fees. Lenders can charge a range of fees on used car loans — termination fees, origination fees, loan maintenance fees and more. Review all the extra costs that come with your used car loan.
    3. Flexibility. Can you make additional and lump-sum payments during your loan term? Are you able to repay your loan early without penalty?

    How long will I pay my used car loan?

    The average used car loan is shorter than a loan for a new car. Loan term varies between lenders, but it’s usually between two to seven years for variable rate loans, or one to five years for fixed rate loans. Longer loan terms can make your monthly repayments smaller — but you’ll pay more interest, making your loan more expensive in the long run.

    Are used car loans cheaper than dealership finance?

    Low-interest car finance deals can be tempting, but keep in mind low, ongoing repayments don’t automatically mean a cheaper loan.

    Take a look at the following features of both the loan and the dealership finance offer to find out which one is the better deal:

    • Interest rates. Dealership finance generally has lower interest rates to get you in the door. But if you shop around and find a used car loan with lower rates and reasonable loan terms, it may be the better choice.
    • Down payments. Dealerships financing generally requires a down payment and is usually a couple of thousand dollars.
    • The price of the car. Sometimes dealerships offering good financing promotions can’t give as good a deal on the price of your vehicle — it pays to negotiate the price before securing your loan.
    • Extras. This shouldn’t affect the price of the actual finance amount, but you should consider the value of extras like additional insurance or an extended warranty.

    Bottom line

    Whenever you apply for a used car loan, take the time to read the terms and conditions. It’s important to be aware of all fees and charges, as well as any restrictions on the vehicle or loan.

    A used car can be a reliable option when you’re looking for your next set of wheels — just make sure you get the right used car financing.

    Frequently asked questions


    Matt Corke is the head of publishing in Australia for Finder. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time he has survived the dot-com crash and countless Google algorithm updates.

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