Buying a used car offers affordability and value. However, securing financing for a used vehicle requires careful planning to ensure you get the best deal.

If you’re wondering how to get financing for a used car, here’s a step-by-step guide to help you through the process.

Step 1: Check your credit score

Your credit score determines the interest rate and terms you receive when applying for financing. Before starting the process, it’s important to check your credit report for accuracy. You can obtain a free copy from Equifax, Experian, and TransUnion through AnnualCreditReport.com.

A higher credit score — typically 670 or above — can help you secure lower interest rates. If your score is below average, you may still qualify for financing. At Credit Acceptance, we’ve helped over 4 million people with all types of credit get auto financing.

Step 2: Set your budget

Financing a used car isn’t just about being able to make the monthly payments. You’ll also want to consider the total cost of ownership.

Make sure to factor in:

• Down payment – A higher down payment can lower monthly payments and improve loan terms
• Monthly payments – Your installment payments should be less than 15% of your monthly budget
• Insurance costs – Used cars may have lower premiums, but coverage still adds to your total cost
• Taxes and registration – These fees vary by state and should be factored into your budget.
• Maintenance and repairs – Used cars may require more maintenance than new vehicles

AAA has a useful calculator that can show you what to expect.

Step 3: Seek financing pre-qualification

Financing pre-qualification gives you more confidence once you’re at the dealership.

What you’ll need for pre-qualification:

• Proof of identity (ex: driver’s license or passport)
• Proof of income (ex: pay stubs or tax returns)
• Proof of residence (ex: utility bill or lease agreement)

You may also need to provide your Social Security Number, your employer’s address and contact info, and information regarding your assets and debts.

Step 4: Find a used car that meets lender requirements

Lenders often have specific restrictions on the used vehicles they are willing to finance. Before finalizing your loan, make sure the car you’re considering meets the lender’s requirements.

Many lenders set age and mileage limits, often declining to finance cars older than 10 years or those with more than 125,000 miles. Additionally, some lenders impose a minimum financing amount, typically requiring you to borrow at least $7,500. A vehicle’s history is also important — many lenders prefer cars with clean titles and may not approve financing for those with salvage or rebuilt status.

Step 5: Finalize the financing and purchase

If you’ve been pre-qualified for financing, follow your lender’s instructions to complete the application and funding process. You may have to submit additional paperwork.

If you’re financing through a dealership, go over the finance agreement before signing. Review the contract carefully for:

• The exact interest rate
• The total cost with interest included (also known as the finance charge)
• Any additional fees or add-ons, such as extended warranties

If anything seems unclear or incorrect, ask questions before signing.

Some additional tips for getting the best financing

Choose a shorter lending term

A shorter term (36-48 months) may mean higher monthly payments, but it reduces total interest paid over time.

Consider a cosigner

If you have bad credit, having a cosigner with good credit can help with financing approval.

Avoid unnecessary add-ons

Dealers may try to sell gap insurance, extended warranties, or service contracts. Only choose what fits your needs and budget.

Know your state’s auto financing laws

Each state has different interest rate caps and regulations — research these before committing.

Securing financing is easier than you think

Yes, securing financing for a used car can feel overwhelming. However, by following the above steps and working with the right lender, you can confidently navigate the process. If you need used car financing and have bad credit or no credit, Credit Acceptance works with over 12,000 dealerships nationwide. Your credit history might not be as big a deal as expected, so see if you pre-qualify today!