Getting a Tesla with bad credit is possible, but it requires a different approach than walking into the Tesla website and clicking “finance.” Tesla’s own financing program requires excellent credit, typically a score of 720 or higher. If your score falls below that, you’ll need to explore third-party lenders, build a larger down payment, or take steps to improve your credit before applying.
Why Tesla’s Direct Financing Won’t Work
Tesla Financial Services sets a high bar. The company generally requires a credit score of 720 or above and a down payment to approve financing through its in-house program. Loan terms are usually limited to 60 or 72 months. If your credit score is in the 500s or 600s, your application will almost certainly be denied through Tesla directly.
This doesn’t mean you can’t buy a Tesla. It means you’ll need to secure your own financing before placing an order, then select “third-party financing” at checkout instead of Tesla’s built-in option.
Third-Party Auto Lenders for Bad Credit
Dozens of banks, credit unions, and online lenders offer auto loans to borrowers with subprime credit. The tradeoff is a significantly higher interest rate. Based on Experian data from late 2025, borrowers with scores between 501 and 600 paid an average APR of about 13.17% on new car loans. For deep subprime borrowers (scores below 500), the average jumped to roughly 16.01%. On a $35,000 loan over 72 months at 13%, you’d pay roughly $15,000 in interest alone, nearly doubling the effective cost of the car.
Credit unions tend to offer lower rates than big banks or online subprime lenders. Some also give small rate discounts for electric vehicles. Digital Federal Credit Union (DCU), for example, offers a 0.25% rate reduction for EV buyers. It’s worth checking with local credit unions as well, since many have similar programs and more flexible underwriting for members.
When shopping for a third-party loan, get preapproved before configuring your Tesla order. Preapproval tells you exactly how much you can borrow, at what rate, and for how long. Multiple auto loan applications within a 14-day window typically count as a single hard inquiry on your credit report, so rate-shopping won’t hurt your score much.
Put More Money Down
A larger down payment is one of the most effective tools for getting approved with bad credit. It reduces the lender’s risk because you’re borrowing less relative to what the car is worth. This ratio, called loan-to-value (LTV), matters a lot to subprime lenders. If the car costs $35,000 and you put down $10,000, the lender only needs to cover $25,000 on a vehicle worth $35,000. That’s a much easier loan to approve than one that covers the full purchase price.
Aim for at least 15% to 20% down if your credit is below 650. Some subprime lenders will require that much before they’ll consider the application. If you have a trade-in vehicle, its value counts toward your down payment as well.
Consider a Used Tesla
A lower purchase price means a smaller loan, which makes approval more likely and monthly payments more manageable. Used Model 3 and Model Y vehicles are widely available at prices well below their new counterparts. Tesla sells certified pre-owned vehicles directly through its website, and you can also find them through independent dealers and private sellers.
One thing to watch: interest rates on used car loans run higher than new car loans across all credit tiers. Subprime borrowers averaged about 19.42% APR on used cars in late 2025, compared to 13.17% on new ones. A lower sticker price can still save you money overall, but run the numbers on total interest paid before assuming used is automatically cheaper.
Leasing as an Alternative Path
Tesla offers leasing on certain models, and some buyers with borderline credit find leasing easier to qualify for than financing. Tesla’s lease program requires a hard credit pull and approval, so there’s no guaranteed minimum score. The monthly payment on a lease is typically lower than a loan payment since you’re only covering the car’s depreciation over two or three years rather than its full value.
There are meaningful downsides. Tesla leases don’t include a purchase option at the end of the term, so you’ll return the car when the lease is up. You’re also locked into mileage limits and wear-and-tear standards. If you want to own the car long-term, leasing delays that goal rather than advancing it.
Improve Your Credit First
If you’re not in a rush, spending six to twelve months improving your credit score before applying can save you thousands in interest. A few targeted moves can push a score from the low 600s into the high 600s or low 700s relatively quickly.
- Pay down credit card balances. Your credit utilization ratio (how much of your available credit you’re using) is one of the biggest factors in your score. Getting below 30% utilization helps. Getting below 10% helps more.
- Dispute errors on your credit reports. Pull your reports from all three bureaus at AnnualCreditReport.com and look for accounts you don’t recognize, incorrect balances, or late payments that were actually on time. Removing even one error can bump your score.
- Avoid opening new accounts. Each new credit application creates a hard inquiry and lowers the average age of your accounts. Both temporarily drag your score down.
- Set up autopay on everything. Payment history is the single largest factor in your credit score. Even one missed payment can cause a significant drop, and consistent on-time payments gradually rebuild trust.
Moving from a 580 to a 680 could cut your auto loan interest rate by several percentage points, potentially saving $5,000 or more over the life of a 72-month loan on a $35,000 vehicle.
What a Realistic Plan Looks Like
If your credit score is below 620 today and you want a Tesla, the most cost-effective path usually combines two strategies: improve your credit while saving for a larger down payment. Even three to six months of focused effort can meaningfully change both numbers. Then, when you’re ready, get preapproved through a credit union or online lender before placing your Tesla order.
If waiting isn’t an option, a third-party subprime auto loan will get you behind the wheel now, but budget carefully. At 13% to 16% APR, the interest charges are steep. Make sure the monthly payment, plus insurance and electricity costs, fits comfortably in your budget. You can always refinance the loan later if your credit improves, replacing the high-rate loan with a lower one and saving on the remaining interest.