Purchasing a Car With Bad Credit and No Down Payment


It can be extremely difficult to find a lender who accepts bad credit car loans with no down payment. Applying for loans only to end up being declined is exhausting, and by applying too often, you can even make your credit score worse in the process. To help you, Good Fellow’s Auto Wholesalers has put together this guide on how to be approved for a zero down payment car loan.

What is a Down Payment?

The purpose of a down payment is to help assure lenders that you are serious about your loan. It also protects them just in case the loan isn’t repaid. By paying a small amount upfront, your monthly payments can be brought down to a manageable level. Most car loans prefer a 20% down payment, but the average is around 12%. Although typically this type of payment is required, there are a few alternatives that will allow you to drive away without needing to offer a down payment.

Improve Your Credit

One way to get a car loan without a down payment is to apply when you have a good credit score. Lenders are more inclined to offer better terms to applicants with a strong credit history and score. Generally, a score of 680 and up are required to secure a zero down payment car loan with a good interest rate. If your score is less than 680, it’s a good idea to increase your score before applying for a lona.

Use a Cosigner

The best way to get approved for a bad credit car loan with a low or $0 down payment is to find someone with a higher credit score that you can use as a cosigner, such as a friend or parent. The person who signs with you will share ownership and payment responsibility, so it is important to pay your bills on time every month.

Qualifying for a Zero Down Payment Auto Finance

No down payment loans present the highest risk for lenders. Before an applicant’s approval, their risk levels will need to be assessed. Our auto finance experts will mainly review your credit history and your income when you apply. We do this to ensure that you can afford your monthly loan payments easily. An average car loan payment should never be more than 10% of your monthly gross pay. The more you make, the more likely it is you will be approved for a no down payment loan.

There are many reasons for wanting a car loan with no down payment, but the most common is for its affordability. However, being able to afford a car loan is more than just tossing money down for the down payment. The value of the car and the monthly payments also play a big part in the loan approval. Cars that are fairly priced and likely to maintain a steady value will have a higher chance of being approved for car loans than those which are not.

For applicants that have bad credit and are seeking an auto loan with no down payment, the process is a bit different. The car chosen will have to be considered affordable, and if it is a used car, the mileage and year of the car will be taken into account. The lender will consider all of these factors when choosing whether or not to approve your no down payment car loan.

Why Choose Us?

Many traditional lenders such as banks will only offer no down payment loans to applicants with stellar credit. However, while a steady income is important for a no down payment car loan, not everyone has perfect credit. If you are looking to secure a loan for your new car but have less than perfect credit, Good Fellow’s Auto Wholesalers can help you. Give our auto loan experts a call at 1 (855) 581-9590, and we’d be happy to discuss your options with you.

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