CarMax is a strong option for buyers looking for flexible financing with no minimum credit score requirement and a straightforward online process. Its starting APR of 5.75% and loan terms of 24–72 months are competitive.
CarMax Auto Finance offers the ability to apply for preapproval for an auto loan. Just keep in mind that preapproval is not a guarantee of loan approval, and your loan terms and interest rate may be different once you complete a formal loan application.
It's definitely possible to get approved for financing with a 500 score, but you'll likely get a higher interest rate. Coming in with a larger down payment can help, as will having a co-signer.
You will leave with payment in hand the same day you sell us your car.
CarMax works with multiple lenders, including Capital One, Chase and Westlake Financial, to secure funding for borrowers. With over 230 brick-and-mortar stores across the country, CarMax is also a great option if you want to check out your vehicle in person before purchasing.
We offer financing through several finance sources, including CarMax Auto Finance, a division of CarMax. Most of our customers' financing decisions are available in 5 minutes or less.
In general, you should strive to make a down payment of at least 20% of a new car's purchase price. For used cars, try for at least 10% down. If you can't afford the recommended amount, put down as much as you can without draining your savings or emergency funds.
Automakers such as Ford, Kia, and Hyundai are known for working with borrowers who have lower credit scores. In addition, CarsDirect has a network of dealers that specialize in bad credit car loans whether you're considering a new or used car.
FICO Score 5 and FICO Score 8 are both common credit scores. Mortgage and auto lenders often use FICO Score 5, while credit card issuers typically use FICO Score 8.
CarMax Auto Finance
There's no minimum score requirement as CarMax's wide range of financing sources allows them to work with customers with different credit profiles. You can use the retailer's prequalification tool to get personalized terms, such as APR and monthly payments, with no impact on your credit.
We check every car's history to rule out any with flood damage, frame damage, outstanding liens, or salvage history. Any car that can't meet those condition standards gets sold at auction — not to you. Cars must also pass a 125+ point inspection and undergo a detailed reconditioning process to be sold at CarMax.
If you are financed with Carmax Auto Finance, they will do pretty much what they can to avoid the repo, but they still will protect their interest. At 85 days your vehicle could be repoed @ any second.
Can I finance with CarMax? Our finance sources accommodate most credit profiles, and every CarMax customer will enjoy the same upfront pricing and exceptional customer service, in the store and online.
A down payment is not a requirement of the car financing process at CarMax for most customers, but there are several reasons why your down payment can make a difference.
Best rates for new-car loans: Bank of America and PenFed Credit Union. Loans for new cars typically have lower interest rates than used-car loans, so you may already be on track to score a better auto loan rate. Among all of the lenders we reviewed, Bank of America and PenFed Credit Union are our top choices.
According to Car and Driver, “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.”
Every lender sets its own requirements for zero-down-payment deals, if they offer them at all. Generally, the credit score needed to buy a car is at least 661 whether you make a down payment or not.
Payment Amount
For example, for a car price of $20,000, a down payment of $4,000, a loan amount of $16,000, a loan term of 48 months, an annual interest rate of 5%, and a start-of-period payment method, your payment amount would be $366.94. You would be paying this amount each month for your auto loan.
It's good practice to make a down payment of at least 20% on a new car (10% for used). A larger down payment can also help you nab a better interest rate. But how much a down payment should be for a car isn't black and white. If you can't afford 10% or 20%, the best down payment is the one you can afford.
NerdWallet recommends spending no more than 10% of your take-home pay on your monthly auto loan payment. So if your after-tax pay each month is $3,000, you could afford a $300 car payment. Check if you can really afford the payment by depositing that amount into a savings account for a few months.
How do I get paid for my car? You will leave with payment in hand the same day you sell us your car. We pay with a bank draft, which is a type of check where payment is guaranteed to be available by the issuing bank. A bank draft must be deposited and cannot be cashed.
Can I pay ahead? Yes, however, even if you are paid-ahead, finance charges will continue to accrue daily on your account. The next payment you make will be applied first to the finance charges that have accrued since the last payment you made.