Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
You no doubt know there are lots of lenders out there. But if it’s been awhile, you could be overwhelmed navigating the process of choosing one. And your options are thin if your credit score isn’t strong.
Online referral services can help by walking you through the steps of buying a car and connecting you with lenders willing to work with your credit history.
Here, we take a look at one such lending services: CarsDirect.
|Product Name||CarsDirect Auto Loans|
|Min Loan Amount||Varies by network lender|
|Max. Loan Amount||Varies by network lender|
|Requirements||Must provide proof of income, proof of residence, and proof of insurance.|
- Must be 18 or older
- Must provide proof of insurance
- Provide proof of residence in the US
- Provide proof of income
First, do I qualify?
CarsDirect itself doesn’t have any eligibility requirements for its referral service. But to qualify for a loan from one of its lenders, you’ll typically need to be:
- At least 18 years old.
- A current US resident.
- Employed or receiving a guaranteed income.
What makes CarsDirect unique?
An online referral service, CarsDirect is designed to help you get started when shopping for a car loan — especially if you have bad credit, no credit or a past bankruptcy.
Rather than go through banks, credit unions or other traditional lenders — which can be wary of customers with bad credit — CarsDirect’s network includes car dealerships that offer in-house financing without running a credit check.
CarsDirect works by exchanging its traffic to dealerships for lower fees and better deals for the people it refers. You may not be able to get the same rates and terms if you tried to get a loan from your local dealership on your own, but you’re also limited to CarsDirect’s network.
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What types of car loans does CarsDirect offer?
- Bad-credit car loans. CarsDirect puts you in touch with dealers offering in-house financing without running a credit check.
- Car leasing. Rather than buy a car, you can “borrow” one for an extended time. You typically won’t put money down upfront, and your weekly fees could be lower than a car loan.
- Car refinancing. Refinancing allows you to swap your old car loan for a new one with better rates, terms and fees. You could save money by refinancing, even if you have bad credit.
What are the benefits of getting a car loan from CarsDirect?
- Bad credit OK. Its lenders won’t run a hard credit check when determining your rates and terms. Instead, they look at your debt-to-income ratio and monthly expenses.
- No-fee service. CarsDirect makes its money from lenders that pay a fee to be a part of its network.
- More flexible lenders. Dealerships tend to offer more flexibility than traditional lenders. If you have good credit, you can often negotiate better terms than you’d find at a bank or credit union.
- Can save you time. Finding a lender that offers decent deals on bad-credit car loans can take a lot of time on your own. CarsDirect cuts down your research if you need a car as fast as possible.
What to watch out for
- Not much transparency. Information about this site online is more than you’ll find for some competitors — but that’s nothing to brag about. You won’t learn about the rates you can expect from its dealers beforehand, for instance.
- You’re limited to its network. CarsDirect makes their money by charging lenders to become a part of its network. So you may not get the best deal out there — just the best its network offers.
- Lots of calls from lenders. A top complaint from CarsDirect users is the barrage of calls from lenders to deal with — even well after signing paperwork for a car purchase.
- High interest rates. Bad-credit loans generally come with high interest rates and fees that could land you in a cycle of debt if you’re late on a payment or default.
Is applying for a car loan through CarsDirect safe?
Yes. As a referral service, CarsDirect will share your information with car dealers so they can make approval decisions for your car loan. You’re under no obligation to accept an offer.
For a subprime resource, CarsDirect has relatively high customer satisfaction — it scores a 7.7 out of 10 on Trustpilot. It has three pages on the Better Business Bureau (BBB) website: Two for “Cars Direct LLC” — one with an F rating and another with an A+ — and another page just for “Cars Direct,” which also gets an A+. Between all three pages, there are only two reviews. Both are on the “Cars Direct LLC” page with the A+ rating, both are negative.
The main complaint: Customers were annoyed by how many calls they had to field — a hazard of using a referral service — and unpleasantly surprised by hard credit checks. While unresponsive to most complaints filed with the BBB, it did take the time to personalize responses to negative reviews on Trustpilot — a sign of good customer service.
How do I apply with CarsDirect?
- Go to CarsDirect’s website and click Get Started.
- Complete the 60 Second Loan Request form and click Get my car.
What happens after I apply?
- Depending on the time and day you apply, you’ll receive a call from a CarsDirect representative within a few hours to discuss your options.
- Based on your finances, a rep will work with local dealers to find the car you want at a price that fits your budget.
- Visit the dealer’s location or accept a car delivery to your home or office for a test drive. Note that the test drive service may come with a fee.
- Sign the agreement and pay any upfront fees, if specifically required.
CarsDirect claims that people who use its service generally purchase their car from 24 to 48 hours after submitting their online application.
What documents do I need to apply?
The information you’ll need to provide will depend on the specific dealership you’re connected with.
CarsDirect lenders typically ask for:
- Proof of identity. Government-issued ID like your driver’s license or passport, or even a title for your home or other vehicles.
- Proof of income. Generally pay stubs or bank statements are enough, though you may need to provide your employer’s contact information.
- Proof of insurance. You can usually purchase insurance at the dealership, but getting it ahead of time allows you to shop around for the best deal.
- Proof of residence. For instance, a recent utility bill mailed to the address on your ID.
I got a car loan from CarsDirect. Now what?
Sign up for autopay. Avoid late fees because you forgot to make a payment. Just make sure to sign up with an account that won’t be short on funds when your payment is due.
Stay in touch with your car dealer. Keeping your lender in the loop on any financial difficulties you’re having could help you avoid paying extra fees or defaulting if you simply can’t make your payments.
I didn’t get a loan. What do I do?
Just because you weren’t matched with a loan through CarsDirect doesn’t mean there are no lenders in your area that you qualify for. It just couldn’t find the right fit for you within its network. Try applying with other online referral services if you were happy with the process, or consider looking into other types of car financing. If you have poor credit, you might be able to qualify for a credit union loan and get better rates than you can find at other lenders.
Taking steps to improve your credit and pay off your debts can also help make you a more competitive candidate, giving you more — and better — options.
CarsDirect provides easy access to nontraditional car loans for people who don’t have the time to do the research themselves. You could find a decent subprime loan if you have bad credit.
Even if you feel your options are limited, you may want to consider other auto financing options before deciding on any one.
Frequently asked questions
Will I have to make a down payment on my car loan?
Not always. There’s a chance you can get a car loan without paying money upfront, but a down payment is likely if you have bad credit. Down payments with CarsDirect can be around 10% of the car’s value.
What’s the average interest rate on a bad-credit car loan?
Bad-credit car loans typically come with starting interest rates around 10% to 13%, though it ultimately depends on your finances. There’s always a chance your interest could be higher.
How long should I finance my car for?
It depends on your needs and options. With a car loan, you’ll typically sign on for 12-month increments that last from two to eight years. With most loans, you can pay more toward your monthly principal with each monthly payment — just make sure you won’t pay any prepayment fee or penalty.