Can you get a car loan if you have bad credit? Yes. And the best part is it’s pretty easy.

Many people are surprised when they find out just how easy it is to get a bad credit car loan. In many cases you do not even need to undergo a credit history check. The lender will just require a driver’s license, auto insurance and proof of registration. The reason you need proof of registration is because some states will not allow you to buy a car without it. In Pennsylvania, for instance, your license plate is assigned to you, not the car. So to drive your car off the lot you’ll need your title, tags and registration paperwork.

Aside from legal restraints, however, getting a bad credit car loan is simple. If you’ve got the down payment in hand and meet all the legal requirements then you can walk in, buy a car and drive it off the lot in the same day. But you do have to keep up your payments or you will lose the car (and maybe even the privilege of receiving future loans).

Car dealers are willing to take a certain level of risk on loaning money to people with bad credit. That’s because they realize that just because you have bad credit doesn’t necessarily mean that you are a bad person. If you have fallen on hard financial times then you can ride out the waves and emerge with good credit because someone was willing to take a risk on your bad credit.

Bad credit doesn’t have to be a hindrance to owning a vehicle. It doesn’t have to be an obstacle to getting a car loan.

If you want to finance a car and you’re looking for low finance rates then you’d be better off with a new car. Used car and refinance APRs are usually higher. There’s a reason for this.

Typically, used cars cost less than new cars. You may be financing $5,000 instead of $15,000. In general, the more you are financing the lower your finance rate can be expected to be. That’s because you are expected to stretch it out over a longer period of time. If you borrow $20,000 over a five year period, for instance, your finance company looks at it as a bigger risk. If they’re willing to take that risk on you then it’s because they’ve checked your credit history and you are a better credit risk. Otherwise, they wouldn’t take the risk at all.

On the other hand, if you are a high risk borrower then you might not qualify for the higher loan and therefore don’t deserve the lower finance rate. You will likely have to buy the used car at the higher interest rate to prove your credit worthiness. You’ll be borrowing less money, but it’s a slight inconvenience for the privilege of proving you are a good credit risk for the lender.

On a refinance, you pay higher APRs because if you are refinancing then it is because you are no longer a solid credit risk. You are refinancing due to a stressed financial situation. That increases your risk factor and therefore causes your finance rate to go up.

When financing an automobile, your finance rate is dependent upon your level of risk. If you want the low rates then you’ve got to buy a new car and be a good risk.

You have most likely heard of a real estate loan modification. If you are heading toward foreclosure or hit financial difficulty then you can ask your mortgage company to restructure your loan to make payments more affordable. Can you do the same thing with a car loan? Yes, you can.

An auto loan modification works basically the same way as a real estate loan modification. You must ask for it, but you aren’t entitled to a loan modification just for asking.

Your auto lender likely will have a loss mitigation department. Their entire purpose is to lower the natural risks the lender will experience on their loans. This loss mitigation takes place in a number of ways and one of those ways is through loan modification.

So who can receive a loan modification? Typically, hard financial cases that demonstrate a reasonable ability to pay off a car loan after the loan restructuring will be the borrowers who get their desired loan modifications. Otherwise, if you can demonstrate an ability to pay off your loan after the restructuring then you will likely lose your vehicle to repossession. You still have to prove yourself a viable credit risk.

Situations change. Auto lenders know that. But they are also business people and they will not take a loss just because you have financial difficulty. They are willing to take a loss on some loans because they realize that losses are inevitable and unavoidable. But they do their best to select the loans on which they will accept a loss. If you play your cards right, your loan won’t be one of them.