What is the lowest credit score to buy a car?
Most used auto loans go to borrowers with minimum credit scores of at least 675. For new auto loans, most borrowers have scores of around 730. The minimum credit score needed for a new car may be around 600, but those with excellent credit often get lower rates and lower monthly payments.
Yes, it is possible to get a car loan with a credit score of 500, but it can be infinitely more challenging to find a lender willing to approve the loan. A credit score of 500 is considered poor credit, and lenders will likely see you as a higher risk borrower.
How to qualify for a 0% APR car deal. Zero percent financing deals are generally reserved for borrowers with excellent credit — typically classified as a credit score of 800 and above.
300: The Lowest Credit Score Possible. Credit scores range from 300 to 850. Your credit score will change over time and be different depending on which model is used to calculate it.
As mentioned, an 578 credit score is generally considered to be a poor credit rating. Depending on your other qualifications, such as income and employment, you may be able to qualify for certain types of loans (more on that in a bit).
After researching the car finance industry, we think that myAutoloan is best for those with bad credit. The company offers auto refinancing, lease buyouts and loans for new and used cars. Additionally, the marketplace only requires a credit score of 575 — making it easier for subprime borrowers to get a loan.
There isn't one specific score that's required to buy a car because lenders have different standards. However, the vast majority of borrowers have scores of 661 or higher.
Paying cash for your car may be your best option if the interest rate you earn on your savings is lower than the after-tax cost of borrowing.
You could also talk with a local Toyota dealer. Toyota is straightforward about what credit score is needed to buy a car with their financing, and you won't qualify if you have bad credit. Toyota Financial Services requires you to have a score of at least 610 to qualify for an auto loan.
It's possible to find deals on multiple types of finance with 0% APR. The most common is Personal Contract Purchase (PCP).
What is the average US credit score?
The average FICO credit score in the US is 718, according to the latest FICO data from April 2023. The average VantageScore is 701 as of January 2024. Credit scores, which are like a grade for your borrowing history, fall in the range of 300 to 850.
While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
- Exceptional Credit: 800 to 850.
- Very Good Credit: 740 to 799.
- Good Credit: 670 to 739.
- Fair Credit: 580 to 669.
- Poor Credit: Under 580.
The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage. We're going to take at look at FICO® since it has long been the auto industry standard.
Your credit score is a major factor in whether you'll be approved for a car loan. Some lenders use specialized credit scores, such as a FICO Auto Score. In general, you'll need at least prime credit, meaning a credit score of 661 or up, to get a loan at a good interest rate.
The credit score required and other eligibility factors for buying a car vary by lender and loan terms. Still, you typically need a good credit score of 661 or higher to qualify for an auto loan. About 69% of retail vehicle financing is for borrowers with credit scores of 661 or higher, according to Experian.
| Top Auto Loan Lender | Lowest APR | Our Award |
|---|---|---|
| PenFed Credit Union | 5.24% | Best Credit Union Auto Loan |
| Auto Approve | 5.24%** | Best Auto Refinance Rates |
| Consumers Credit Union | 6.54% | Excellent Credit Union Auto Loan |
| Auto Credit Express | Varies | Best Auto Loan for Bad Credit |
CarMax® is an auto financing company that uses the FICO® Score.
- Best overall: PenFed Auto Loans.
- Best from a big bank: Capital One Auto Finance.
- Best for rate shopping: myAutoloan.
- Best for online car shopping: Carvana.
- Best for used vehicle selection: CarMax Auto Finance.
- Best for refinancing: Autopay.
It's usually easier to secure a loan for a new car than a used car because lenders can more easily determine the value of a new car.
What credit score is needed for a 30000 car?
In general, you'll need a FICO credit score of at least 600 to qualify for a traditional auto loan, but the minimum credit score required with vary from lender to lender. As interest rates increase due to inflation, securing a subprime auto loan may be more difficult — but not impossible.
There isn't a set credit score that each person starts out with. Instead, if you don't have any credit history, you likely don't have a score at all.
Benefits of a Down Payment
In short, you'll be gaining equity in the vehicle. If you make a 20% down payment rather than a 5% down payment, you've offset more of the car depreciation hit. You've also lowered your monthly car payment, and you can probably afford to have a shorter term on your loan.
It is indeed a good feeling to pay cash for a car, but your cash resources might not be enough to purchase the car or truck that fits your needs. That is where a car loan might be the better option, giving you a more comprehensive selection of vehicles from which to choose.
A good interest rate for a car loan is typically below 5.18% for new cars and 6.79% for used vehicles. However, the best rate is unique to the borrower so it's best to look at the average interest rates for your credit score category to know if you're getting a good deal.
