A subprime auto loan is a type of loan used to finance a car purchase that is offered to people with low credit scores or limited credit histories. These loans are given to borrowers whose credit scores are considered to be subprime, which is typically a range between 580 and 619, though this can vary depending on the institution or lender. Subprime loans carry higher interest rates than comparable prime loans and may also come with prepayment penalties if the borrower chooses to pay off the loan early. However, subprime borrowers may have no other avenue for purchasing an automobile, so they are often willing to pay the higher fees and rates associated with these types of loans. The interest rates for subprime auto loans will vary among lenders and depend on the type of vehicle (new versus old) and the loan term or length. Subprime auto loans are usually available for new cars or late-model used vehicles with less than 100,000 miles. If you have poor credit or limited credit history, a subprime auto loan can provide you with the ability to buy a car despite having a low credit score. However, it is important to be aware that subprime loans are likely to come with a higher annual percentage rate than a typical auto loan, and in some cases, higher fees can be attached to subprime loans.