How No Money Down Car Dealerships Work

no money down car loans

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Acquiring no money down auto loans can be an easy process even when you have a bad credit score.

You just need to locate lenders that specialize in providing such loans.

We take the guesswork out of finding a dealer near you. Just apply with us today and we’ll instantly match you with a local lender who can help you get a car fast.

bad credit no money down car dealerships near me

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No Money Down Car Dealership Requirements

Repair your credit

Most lenders check if the borrower has a regular monthly income or steady jobs, resided in one place for at least a year, and have a good credit record.  When you have a rating of 680 and above, you have a higher chance of getting the down payment waived without raising interest rates. If your score is between 580 and 669, you may get the waiver but at a higher interest rate. Conversely, when the score is 580 and below, lenders may hesitate to approve auto loans with bad credit, but you can get those that can offer it even with bad credit.

Now, if you need to get a zero-money car loan at a good interest rate, consider checking your credit report. If it needs to be repaired, consider doing that before seeking this financing. You can pay off debts, bills and credit card balances to improve the score.

Shop around

Lenders have different offers on car loans. CompleteAutoLoans has established a good reputation among local credit unions, auto dealerships, banks or other loan providers. Explore the loan rates given currently and check for lenders that offer motor loans without down payment at a considerable rate. Having information on the most common interest rates will help you get to choose one that suits your needs.

Have a cosigner

In this case, you can get a friend or a family member with good credit to cosign the purchase contract with you. This could assist you to get this loan at a substantial interest rate since, in such situations, lenders realize that the vehicle belongs to the individual with a weaker score.

Nevertheless, when you consider a cosigner, you should not take it lightly since they have a great responsibility for the loan. They become liable when you default, the amount of loan balance is calculated among their debts as they apply for credit cards or loans, and any missed or late installments affect their credit history. Thus, you should be diligent when making the monthly payments and have your records well organized to prevent any disagreement.

Consider vehicle trade-in

You can trade-in your old car instead of making a down payment with the aim of getting a reduction of monthly payments and interest rates after acquiring a no money down auto loan.  Nonetheless, you should shop around to ensure you get one that will offer a good resale value for your vehicle as well as have a considerable interest rate and installments. 

Consider saving up for a down payment

I know, we should be telling you about how to get a car loan without a down payment, but it is worth highlighting that if you’re not in a rush or a crucial condition where you need to purchase an automobile with zero cash, then consider saving some money for the deposit.

You would really be in a better position if you made some payment to avoid finding yourself in an upside-down situation when you need to sell your ride down the road. This is because cars depreciate quite fast, and you could still owe your lender a lot more if the outstanding loan balance exceeds the vehicle’s resale value.

20% down payment has been the traditional amount dealers need, but recently, they have been flexible on the minimum deposit needed. In 2019, most car buyers made an average of 11.7% down payment as the costs of automobiles have risen. Any amount down could save you from the above scenario as it lowers principal and interest charges you owe your lender.

We take the stress out of looking for a trusted provider. Just apply today with us and get instant access to local lenders.


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Frequently Asked Questions

Can you get a car loan with no money down?

Yes, it’s possible to get an auto loan with zero money, however, higher interest rates are charged after acquiring it. The good news is Complete Auto Loans works with credible lenders who offer really affordable deals.

Where can you get a car with no money down?

You may still find it difficult to get dealerships that offer guaranteed vehicle financing with zero money. This shouldn’t be the case when you utilize fast internet processes accordingly. You might want to seek assistance from a reputable and reliable online service provider such as Complete Auto Loans. The following tips will give a general idea of what you should look for when searching for such lenders.

1. Look for lenders that are willing to work with you

Getting into contact or negotiations with the right type of dealership could make a huge difference when making a car purchase, especially if your financial situation is tight. To identify a lender who is willing to work with, look for the following;

  • Feeling comfortable when asking questions about issues like installments, interest rates, prices, models available for such loans and many more. The dealer should be ready to give honest and straight answers.
  • The lender should be friendly and helpful
  • Easily get the impression that the credit provider is willing to work with you despite your current financial situation. 

2. Search for a dealer offering a reasonable price

As highlighted above when seeking a car loan with zero money or with bad credit, you should expect higher interest rates than average auto loans. Nevertheless, there are lenders who could charge excess payments and rates. You shouldn’t agree to pay an unreasonable amount for your desired ride. To evade this, you need to do adequate research and shop around for a dealer offering a reasonable price before making a final decision. Additionally, take a look at the payment plan being given to ensure that they’re affordable and reasonable to you.

3. Seek out for a dealer with good cars

Just because you’re offering zero money for a car purchase doesn’t mean that you shouldn’t choose a ride that you will be comfortable with and enjoy. Check for one with newer-model cars that are likely to satisfy your transportation needs. Such dealers show some form of commitment to work with you and your financial situation. There is no need for you to buy a car when they can’t provide the automobile you need.  

Can I get a car loan with a credit score of 500?

A credit rating of 500 is somewhat a challenge when you need to acquire a car loan. Truth is, most first time buyers show up at dealerships with a similar or lower score and still qualify for a car loan.

Why is this the case?

Having a bad credit score may not be due to negligence, and this shouldn’t worry you too much when you need to acquire a car loan. This is because there are lenders who will help you buy a car at considerable rates.

Options to consider when getting an auto loan with bad credit

Have a cosigner

Once you get a cosigner, he or she allows you to ‘borrow’ their credit history as well as pledge to make your payments if it becomes difficult for you. A cosigner has a great responsibility on the loan since they become liable when you default, the amount of loan balance is calculated among their debts as they apply for credit cards or loans, and any missed or late installments affect their credit history.

Since the lender has someone else to go to when you default the loan, there is less risk and you’re more likely to get approval as well as a lower interest rate. Nonetheless, you should be diligent when making the monthly payments and have your records well organized to prevent any disagreement.

Look for a second chance auto loan

These loans give people with bad credit a second chance. The lender tries to provide you with finance options that are guaranteed for approval. This may be a suitable option for you, but its downside is that it’s accompanied with higher fees and interest rates. Ensure that you have done adequate research to get some alternatives and choose one at a substantial rate.

Attempt a buy-here-pay-here dealer

Unlike in conventional sale where you use a third-party lender to purchase your car, in this case, you choose a vehicle at the dealer and finance it from there. The dealership decides on approving your loan, and are more flexible to provide finance despite the poor score. 

However, these loans have drawbacks that you should check on before taking this offer. Their interest rates are usually higher than those offered by other lenders. Your vehicle is at a higher risk of repossession when you miss payments. Moreover, most of these dealers don’t report to credit bureaus hence these loans may fail to boost your credit. You could ask if the dealer reports to the bureaus when unsure.

Try a credit union

You don’t have to be a member of a credit union to get some financing. As you check on varieties available, you could begin with one that is associated with your employer and a professional organization to which you belong to. This way you may get a preapproval before going to a dealership and you’ll know what you can afford.

Things to consider as you choose an auto loan lender with poor credit

With poor credit, you may be desperate to get finance for your vehicle. However, be careful not to land to even worse problems by checking on the following;

The interest rate being charged

Some lenders take advantage of your situation and attach excessive monthly payments and interest rates, keep off from such.

Check the lender’s reputation

Verify their reputation from relevant authorities as well as from customers’ reviews. Complaints and compliments made on the lender will provide a rough idea of its reputation.

What credit score do you need to get zero-percent financing?

Zero percent financing in most cases is possible when you have an excellent credit rating. Credit scores of 700 and above on a scale of 300 to 850 can guarantee you an auto loan at zero percent. If you can get to that score, you will have significant savings in the end. When you purchase your ride at $25,000 with a loan term of 60-months at a zero percent interest deal, you could save $3,300 on interest charges. This is in comparison with a similar loan at 5% interest charge. 

How is it possible to get financing at zero percent?

When an automaker gives zero percent financing, they let go of the money they would have made from interest charges. In most cases, it’s offered when the automobile is slow-selling or the seller wants to clear existing models to give room for newer models.

Dealerships provide this offer when they need to sweeten a deal, or as a way of motivating the buyer to make a large down payment. This in most cases occurs when a borrower qualifies for a loan with a low annual percentage rate, and the deposit is deemed reasonable by the dealer.

Get approved today

Getting finance to purchase a car puts you in a better position to get your desirable option. No money down auto loans are available for you, as discussed above. At Complete Auto Loans, we have a team of experienced credit and personal finance officers ready to help you.

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