How to Finance a Used Auto Online With Bad Credit

Financing a used car online with bad credit can be hard. You will find that you will not be able to take part in finance or leasing specials, and you may have limitations on which car you can pick out due to your credit history, money down and overall lending institution requirements. You may be able to find a bank to pre-approve you, and you can shop freely from there while following the banks requirements.

Instructions

1

Get paperwork and information so that you may apply for a loan. Bad credit loans involve proof of the following information: Most recent paystub showing your year-to-date earnings, a utility bill showing proof of residency, three to five references that can be contacted by the bank, a work number to verify employment and possibly proof of previous debts that have been paid off before lending can be done.

2

Try to receive a pre-approval before shopping. Lenders target people with bad credit--known as subprime lenders--and it is often easier to receive a loan from this kind of institution without the stresses and hassle of a dealership. The bank that pre-approves you will let you know your options--generally there are vehicle age and mileage limitations.

3

Search for dealers through the Internet, phone calls or word of mouth to find out what can work with people who have bad credit. Although there is a lot of lending institutions, dealers or car lots use different banks and some may have a better relationship with the financial institution than others. You will have to receive your pre-approval through a dealers lending institution to buy a car online.

4

Once you have your pre-approval, you may start to search for your car through the dealer who approved you or anywhere else with a vehicle approved by the independent lending institution's requirements. When buying online, you will leave a deposit to hold the vehicle until you can physically have the vehicle shipped or until you can go into the dealership and sign the paperwork.

5

Buy your vehicle. If not physically going into a dealership, you will have the paperwork mailed to you and you'll have to sign and return it before the vehicle can be transported to you. Most likely, you will have to provide your proof of income, residency and work and reference information beforehand through fax. If going into the dealership, you will need to bring this paperwork and sign the bank contracts and Department of Motor Vehicle paperwork before you can leave with your vehicle.