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


In a Nutshell

Credit Acceptance Corp. considers people with bad credit, no credit history or other challenging credit situations for auto financing through one of its partner dealerships. But loan terms may not be very favorable, especially if you get a loan through one of the lender’s “buy-here, pay-here” dealer partners.

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Pros Cons
Considers applicants with bad or no credit Loan terms are determined by the dealer
Works with auto dealers in all 50 states The lender’s network includes buy-here, pay-here dealerships
Reports payments to all three credit bureaus Limited loan options

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

Credit Acceptance Corp. offers indirect, subprime auto loans through its network of auto dealers. If you’re having a hard time getting approved for an auto loan with other lenders, Credit Acceptance Corp. may be able to help.

Limited loan options

Credit Acceptance Corp. offers vehicle loans only for new and used cars bought from its partner dealerships. If you want to refinance or get a private party loan, you’ll need to find a different lender.

Considers a range of applicants

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

The financial services company claims on its website that it makes it possible for dealers to provide credit approval to a range of applicants, even if they have negative items on their credit reports, like bankruptcy or multiple repossessions. It’s even possible to get approved with temporary income or unemployment income.

While Credit Acceptance Corp. doesn’t specify a minimum credit score requirement, nearly 96% of the lender’s existing loans in 2019 were to people with FICO scores below 650 — or no FICO scores, according to the company’s 2019 fiscal year SEC filing.

If you’ve been turned down by other auto lenders, you’ll probably have a better chance of getting a car loan through Credit Acceptance Corp.

You must buy 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 dealers across the U.S. The network includes franchise, independent and buy-here, pay-here dealers in all 50 states.

But you may want to avoid the buy-here, pay-here dealerships. Interest rates can be high, which can make it difficult to keep up on payments. More than a third of buy-here, pay-here auto loans end up in default, according to a 2018 National Independent Automotive Dealers Association report.

It won’t be easy to compare terms

Credit Acceptance Corp. states on its website that loan requirements and terms are set by each dealer — meaning you might not be able to see rate quotes, repayment terms or other terms upfront. Since Credit Acceptance Corp. doesn’t provide interest rate ranges on its website, it may be difficult to get any idea of the terms you might qualify for until you’re already deep into the process.

When you start an application, the lender will match you with up to three car dealers in your area. You may be able to compare the terms each dealer will offer, but this could be a time-consuming process.

A closer look at Credit Acceptance Corp. auto loans

Here are some other features of Credit Acceptance Corp. to consider.

  • The lender reports payments to all three major credit reporting agencies, which can help you build or rebuild your credit profile, as long as you make your payments on time.
  • While some lenders have mileage, age or other restrictions on the vehicles they’ll finance, nearly any vehicle at a participating dealership is eligible for financing through Credit Acceptance Corp.
  • Credit Acceptance Corp. offers various payment options if you enroll in its autopay feature. You can choose from weekly, bi-weekly, monthly and semi-monthly payments, making it easy to line up your payments with your paychecks.

Is a Credit Acceptance Corp. auto loan right for you?

Credit Acceptance Corp. could be a good option if you desperately need a new car and you’re not having any luck getting approved with other lenders.

It’s especially worth considering if you have a bankruptcy on your credit reports or you’ve defaulted on one or more auto loans in the past, resulting in repossession.

That said, because the finance company doesn’t provide a lot of information upfront about its annual percentage rate range and other terms, it may be wise to try working with other lenders first.

Also, because the lender chooses which dealers in your area you can work with, you may find more flexibility with another lender that works with people with no credit or less-than-perfect credit.

How to apply for a loan from Credit Acceptance Corp.

You can start the credit application process with the lender online through its website.

Credit Acceptance Corp. will provide a list of three dealers in your area and share your information with them. You may choose to reach out to the dealers directly or wait until they call or email you.

You’ll need to visit at least one of the dealers to choose a vehicle and complete the credit application.

If you’re approved, the dealer will provide the terms of the loan for you, at which point you can decide whether to accept them or try another partner dealer — or go to a different lender entirely.

Not sure if Credit Acceptance Corp. is right for you? Consider these alternatives.

Credit Acceptance Corp. might make it easier to get your next car, even if you’ve had some financial setbacks. But it’s not the only lender out there that offers easier qualification, so it may be worth shopping around before you submit an application. Here are some other options to consider.

  • Auto Credit Express auto loan: Auto Credit Express may be a good option for people who want to refinance their car loan.
  • auto loan: may be ideal if you want the ability to quickly get multiple offers that you can compare, if you’re approved.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Cr… Read more.