 TITLE: Auto Lenders for Bad Credit Borrowers CONTENT: Who Has the Best Auto Loan Rates?\n---------------------------------\nYou can get an auto loan from different types of lenders, and you won't necessarily know which one will offer you the lowest interest rate until after you apply. Each lender has its own way of evaluating applicants, and your loan offer and rates could depend on your creditworthiness, the down payment, the vehicle and repayment term.\nHowever, just as you'll be shopping for the right vehicle, you can shop around to find the best lender. You can often find auto loans from:\n*   **Banks and credit unions**: Banks and credit unions both play a large role in the auto loan financing market. You may be able to get preapproved for an auto loan online, over the phone or at a branch before you go to a dealership to purchase a vehicle.\n*   **Dealer-arranged financing**: Once you're at the dealership, a finance manager can submit your loan application to multiple lenders to see which offers you the best rates. While having the dealership arrange the financing can be convenient, the dealership might take a cut of the loan amount for the service and you could receive a slightly higher interest rate as a result.\n*   **Online lenders**: Some online financing companies offer auto loans. There are also aggregator sites that let you submit one application to get several auto loan offers.\n*   **Captive financing lenders**: Many auto manufacturers also run financing companies that offer loans to customers. Captive financing companies may offer special incentives, such as 0% APR loans, to borrowers with good to excellent credit who are purchasing a new vehicle.\n*   **Buy here, pay here (BHPH) dealerships**: A BHPH dealership directly finances auto loans rather than acting as a middleman between you and a lender. BHPH dealers often work with people who have bad credit and typically charge high interest rates. These dealers may also be more likely to repossess your vehicle when you miss a payment, sometimes even installing devices that they can use to quickly disable or find the vehicle.\nTo help get a sense of whether you're being offered a good rate, you can compare your loan offer to the average interest rate that other borrowers with similar credit received. Experian's State of the Automotive Finance Market for the second quarter (Q2) of 2020 breaks these down based on borrowers' credit score ranges and whether they bought or leased a new or used vehicle.\nSource: Experian's State of the Automotive Finance Market, Q2 of 2020 END