How Can I Get A Car With No Money Down?

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Do you desperately need a car but have no money or a job? Here’s the good news. It’s possible to drive a leased vehicle with no money down. However, financing the whole purchase can result in high-interest rates ranging from 12% to 22%.

Unless you want to pay such excessive terms, this is one of the only ways you can drive a new car without a down payment. On the other hand, no-money-down car loans are available if you don’t have the means for a down payment. However, APRs or annual percentage rate auto loans are only offered to those who have a high credit score.

With that being said, how can you secure a no-money-down car loan if you’re tight on cash? Let’s dive in!

Do your homework

Car loans vary, so it makes a lot of sense if you do your homework and shop around before you visit your local dealership. You can consider local credit unions, different car dealerships, alternative loan providers in your area, and banks.

Also, make sure to conduct your research online about the current auto loan rates with no downpayment. Once you’re familiar with the current auto loan rates around, you can prevent yourself from getting ripped off by exorbitant dealership offers.

You can also use online auto loan calculators to get a better idea of your monthly car payment, depending on the loan term, interest rate, and amount you borrow. Such tools are readily available on most lending websites.

Keep your trade-in

If you have an old car that you’re looking to upgrade, you can always use it as a trade-in. This way, you won’t have to worry about coming up with the full purchase price for the new car all on your own.

The dealership will appraise your old car and give you a trade-in value that’ll be applied to the purchase of your new car. However, take note that the dealership will most likely lowball you on the trade-in value.

To avoid this, it’s always a good idea to research your car’s trade-in value ahead of time using online resources like Kelley Blue Book or Edmunds. This way, you can counter the dealer’s trade-in offer with a more reasonable one.

You can also sell your old car on your own to get the most money possible, which you can then use as a down payment for your new car.

Look for dealer incentives and rebates

If you want to drive a new car but have no money for a down payment, you can always look for dealer incentives and rebates. These are typically offered by the manufacturer to entice customers into buying their cars.

Dealer incentives can come in the form of cash back rebates, low-interest financing, or even freebies like vacations or gift cards. You can use these incentives to lower the amount you need to finance or lease the new car.

To find out if there are any dealer incentives or rebates available, you can check the manufacturer’s website or ask your local dealership.

Consider leasing

Leasing a car is another option if you want to avoid putting any money down. When you lease a car, you’re essentially renting it from the dealership for a set period, typically two to four years.

At the end of the lease term, you can either return the car to the dealership or buy it outright. One of the benefits of leasing is that you don’t have to put any money down when you first get the car.

However, you will have to pay a security deposit, which is typically equal to one or two monthly payments. You may also be responsible for other fees like acquisition fees and disposition fees when you return the car at the end of the lease term.

Despite these extra costs, leasing can still be a more affordable option than buying a car outright, especially if you don’t have the money for a down payment.

Get a co-signer

If you have bad credit or no credit, getting a co-signer with good credit can help you qualify for a no-money-down auto loan. A co-signer essentially agrees to take on the responsibility of the loan if you can’t make the payments.

Keep in mind that you’ll likely have to pay a higher interest rate if you get a co-signer since you’re considered a high-risk borrower. You should also be aware that late payments will not only affect your credit score but also your co-signers.

Before you get a co-signer, make sure you’re confident that you can make the monthly loan payments on time. You don’t want to risk damaging your relationship with someone willing to help you finance a car.

Save up for a down payment

If you want to avoid putting any money down on a car, your best bet is to save up for a down payment. This may take some time, but it’s the most guaranteed way to get a car with no money down.

Start by setting aside some money each month into a savings account. You can set up an automatic transfer from your checking account to make saving easier. Once you have enough saved up, you can use it as a down payment on your new car.

Saving up for a down payment may not be the quickest way to get a new car, but it’s probably the smartest. By doing this, you’ll avoid paying interest on a loan and won’t have to worry about being upside down on your car loan.

Look for special programs

There are a few special programs that can help you buy a car with no money down. These include the GM Down Payment Assistance Program and the Ford Drive One 4UR Community Program.

These programs are typically reserved for people with low incomes or bad credit, but it’s worth checking to see if you qualify.

Keep in mind that these programs may require you to take out a higher interest loan or put some money down when you first get the car. But if you’re struggling to come up with any money for a down payment, these programs can be a lifesaver.

Improve your credit score

The very first step you should take if you want to get approved for a no-money-down car loan with a low APR is to improve your credit score. This will give lenders the confidence that you’re a low-risk borrower, which is what they like to see.

You can improve your credit score by paying off any outstanding debts, such as credit card balances, personal loans, and utility bills. You should also make sure to keep up with your current payments, such as rent, mortgage, and car insurance. Additionally, you can check your credit report for any errors that may be dragging down your score.

If you have a limited credit history, you can try to build it up by becoming an authorized user on someone else’s credit card or taking out a small personal loan and repaying it on time.

Once you have a good credit score, you’ll be in a much better position to get approved for a no-money-down car loan with a low APR.

In Conclusion

Getting a car with no money down can be tricky, but it’s possible if you take the right steps. You’ll need to improve your credit score and save up for a down payment. You may also be able to qualify for special programs that can help you get a car with no money down.

If you’re patient and persistent, you’ll eventually be able to get the car you want without having to put any money down. Just make sure you’re prepared to make higher monthly payments if you don’t have a down payment.

Do you find this article helpful? Let us hear your thoughts by leaving a comment below.

About Marcus The Car Guy

I've been in car sales and finance for over 20 years, working at the highest volume dealerships in the nation including Fletcher Jones, DCH and more. Want to pick my brain on finding cars, negotiating cars, and structuring car deals?

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