One-bit radar, performing signal sampling and quantization by a 1-bit analog-to-digital converter, is a promising technology for many civilian applications due to its low-cost and low-power consumptions. In this article, problems encountered by a 1-bit linear-frequency-modulated continuous-wave (LFMCW) radar are studied, and a two-stage target detection method termed as the dimension-reduced generalized approximate message passing (DR-GAMP) approach is proposed. First, the spectrum of 1-bit quantized signals in a scenario with multiple targets is analyzed. It is indicated that high-order harmonics may result in false alarms and cannot be neglected. Second, based on the spectrum analysis, the DR-GAMP approach is proposed to carry out target detection. Specifically, linear preprocessing methods and target predetection are first adopted to perform the dimension reduction, and then, the generalized approximate message passing algorithm is utilized to suppress high-order harmonics and recover true targets. Finally, numerical simulations are conducted to evaluate the performance of the 1-bit LFMCW radar under typical parameters. It is shown that compared to the conventional radar applying linear processing methods, the 1-bit LFMCW radar has about 1.3-dB performance gain when the input signal-to-noise ratios of targets are low. In the presence of a strong target, it has about 1.0-dB performance loss.