Credit Acceptance Corp. auto loans review: Bad-credit and no-credit car loans

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Editors’ take: Credit Acceptance Corp. may be one of only a few lender options if you have bad credit or no credit. But you’ll sacrifice flexibility and transparency. This lender chooses which dealers you can work with, and those dealers determine your loan terms — making it difficult to compare loans in advance.


Credit Acceptance Corp. auto loans at a glance

Types of loans offered

New- and used-car loans only, through select dealerships

Starting APR

Not disclosed

Loan amounts

Determined by dealer

Loan terms

Determined by dealer

Minimum credit scores required

Not disclosed. But 96.1% of the lender’s existing loans in the first six months of 2020 were to people with FICO scores below 650 or no FICO scores, according to the company’s June 30, 2020, SEC filing.

Vehicle restrictions

“Nearly any” vehicle at a participating dealership is eligible for financing.

Availability

Available in all 50 states

Ability to apply for prequalification or preapproval?

No

How to apply

Get connected with three local dealers by beginning the credit approval process online

Other requirements

  • Must be 18 years old
  • Must have a Social Security number to complete the loan application process at the dealership
  • Proof of income
  • Down payment (set by dealer)

Pros

  • Considers applicants with bad credit or no credit and a range of income
  • Reports payments to all three credit bureaus
  • Flexible payment plans with autopay enrollment

Cons

  • Loan terms are determined by the dealer
  • The lender’s network includes buy-here, pay-here dealerships
  • Limited loan options

What you need to know about Credit Acceptance Corp. auto loans

Based in Southfield, Michigan, Credit Acceptance Corp. offers indirect, subprime auto loans through its network of franchise, independent and buy-here, pay-here dealerships across the country.

Considers applicants with bad or no credit and different types of income

Credit Acceptance Corp. specializes in working with people with lower credit scores or no credit history at all.

The company claims on its website that it “enables dealers enrolled with Credit Acceptance to approve everyone,” including people who have experienced financial setbacks such as multiple car repossessions and bankruptcies. It’s even possible for people with fixed income, unemployment income or temporary income — or people who are self-employed — to get approved.

If you’re struggling to get approved for an auto loan with other lenders, you may have a better chance of approval with Credit Acceptance Corp.

Offers flexible payment plans

If you’re approved for a loan and enroll in the company’s autopay feature, you’ll have a choice of a weekly, bi-weekly, monthly or semi-monthly payment plan to fit your financial situation. These options also make it easier to line up your payments with your paychecks.

You’ll be limited to buying from a partner dealership

If you want to work with Credit Acceptance Corp., you’ll have to buy a car through one of its partner dealerships. These dealerships are located in all 50 states, but there’s no guarantee they’ll be close to where you live.

It’s also worth noting that some of these dealerships are buy-here, pay-here dealers. Interest rates with these dealers can be high — the average was 20% in 2018, according to the National Independent Automobile Dealers Association’s 2019 Used Car Industry Report. That interest can add up — for example, if you bought a $12,000 used car with an interest rate of 20% and 60-month loan term, you’d end up paying an additional estimated $7,076 in interest.

Comparing loan terms isn’t easy

Shopping around for an auto loan and comparing options can help you find the best loan for your needs. But with Credit Acceptance Corp, getting an idea of the rate and terms you may qualify for can be a time-consuming process.

Loan requirements and terms are set by each partner dealership, so you won’t be able to see rate quotes or possible loan terms upfront. You’ll first need to fill out the initial credit approval form on the Credit Acceptance Corp. website. From there, the lender will match you with up to three car dealers in your area. You’ll then need to visit those dealers and choose a car to get a sense of the loan terms they may offer you.

Is there a grace period with Credit Acceptance?

Credit Acceptance Corp. doesn’t offer a grace period. The lender considers any payments you make after your due date to be past due.

Does Credit Acceptance help your credit?

Credit Acceptance Corp. reports your payments to all three major credit bureaus. Making consistent auto loan payments, in full and on-time, can help you build or rebuild your credit. Learn more about the factors that can affect your credit scores.

Can I refinance my car loan with Credit Acceptance?

Credit Acceptance Corp. doesn’t offer refinance loans. It only offers new- and used-car loans through its network of dealerships across the country. But it may be possible to refinance your existing Credit Acceptance Corp. auto loan with another lender. That could be a good idea if your credit has improved or interest rates have dropped since you got your auto loan and you think you may be able to qualify for a lower rate.

Learn more about when refinancing a car may make sense.

Alternatives to a Credit Acceptance Corp. auto loan

Credit Acceptance Corp. isn’t the only lender that considers people with a range of credit profiles. If you’re not sure whether Credit Acceptance Corp. is right for you or want to shop around, here are a couple of other lenders to consider.

  • Auto Credit Express auto loan: This lender may be a good option for people with bad credit who want to refinance their car loan.
  • MyAutoLoan auto loan: MyAutoLoan could be a strong choice if you want the ability to apply for prequalification and quickly get multiple loan offers that you can compare, if you’re prequalified. Just keep in mind that prequalification isn’t a guarantee of loan approval.

About the author: Rebecca Giantonio Moran is a senior editor at Credit Karma with a focus on auto. She has nearly 20 years of experience in brand development, content and website strategy, copywriting, ma… Read more.