What to Know Before You Roll Out

Shopping for a car is exciting — but figuring out how you’re gonna pay for it? That’s a whole other story. If you’re just getting started and you’re like, “What kind of car loans even exist?” — don’t trip. We got you.

Whether you’ve got good credit, bad credit, or no credit at all, there’s a car loan out there that works for you. The key is knowing your options — and knowing how to move smart.

This is your no-fluff breakdown of the different types of car loans out there, so you can find the one that fits your budget, lifestyle, and credit situation.

1. New Car Loans

If you're buying a brand-new ride straight off the lot, this is your go-to. A new car loan is typically offered by banks, credit unions, or the dealership itself. These loans usually come with:

  • Lower interest rates (especially if your credit's solid).

  • Fixed monthly payments.

  • Loan terms ranging from 36 to 72 months.

The upside? You get a shiny new ride with all the bells and whistles. The downside? Cars lose value fast, and you might owe more than it's worth if you don’t put money down.

2. Used Car Loans

Copped a pre-owned vehicle? You’ll probably get a used car loan. These work just like new car loans, but since the vehicle has some miles, interest rates might be slightly higher. Still, it’s a smart choice if you're trying to save money up front and avoid the steep depreciation that comes with new cars.

3. Buy Here Pay Here Financing

If your credit’s not looking great and you’ve been getting turned down, it’s time to look at your bad credit car financing options, like buy here pay here car financing. This is where the dealer is also the lender, which means:

  • No banks or middlemen.

  • Fast approvals (sometimes same-day!).

  • Weekly or biweekly payments made directly to the dealer.

This is a top choice for folks looking for bad credit car loans or no credit car loan options.

4. Subprime Auto Loans

Subprime loans are for people with credit challenges. Maybe you’ve missed a few payments, been through a bankruptcy, or are still rebuilding. Lenders who offer subprime loans:

  • Specialize in bad credit car financing.

  • Look beyond just your credit score.

  • Often require higher interest rates.

Sure, it’s not the lowest rate — but it gets you driving when nobody else will. And paying it on time? That’s a major credit boost when you need it most.

5. No-Credit Car Loan

Just starting out and got zero credit history? No sweat. A no-credit car loan is for folks who haven’t built credit yet — students, young adults, or those new to the country. You may need a:

  • Cosigner (like a parent or partner).

  • Bigger down payment.

  • Shorter loan term.

But it’s totally doable, especially with dealers who know how to work the system for you, not against you.

6. Lease Buyout Loan

Been leasing and love your current ride? A lease buyout loan helps you buy that car when the lease ends. Instead of giving the car back, you:

  • Pay off the car’s residual value (aka what it’s worth now).

  • Keep it for good.

  • Sometimes score a lower payment than getting a new car.

This option’s great if you’ve treated the car well and don’t want to start from scratch.

7. Refinancing a Car Loan

Already got a car loan but want a better deal? That’s where refinancing comes in. This means replacing your old loan with a new one, usually to:

  • Get a lower interest rate.

  • Lower your monthly payment.

  • Pay it off faster.

Great for folks whose credit has improved since they first got the loan. Or maybe your current rate is just way too high. Either way — this move can save you some serious cash.

8. Direct vs. Indirect Financing

Here’s the difference:

Direct Financing: You get pre-approved with a bank, credit union, or online lender before you hit the dealership. You walk in already knowing your budget.

Indirect Financing: You let the dealer help you find a loan through a list of trusted partners.

Both work. If you like doing things yourself, direct financing is cool. But if you want it done fast and easy, indirect is where it’s at — and most folks prefer that route, especially when working with someone they trust to get them the best rates.

9. Personal Loans

Last but not least — if you don’t want to deal with traditional car loans at all, you could take out a personal loan from your bank or credit union. These loans:

  • Can be used for anything — including buying a car.

  • Might not require collateral.

  • Often come with higher rates than car-specific loans.

Still, if you’ve got solid credit and income, it could be a quick solution.

Find the Car Loan That Works for You

Your best bet at getting a great deal is to find a dealership or car lot that specializes in working with real people — not just perfect credit scores. Whether you’re looking for bad credit car loans, exploring buy here pay here options, or just trying to figure out what works best for you, find someone who will walk you through it step by step.

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