When you’re looking to finance your next vehicle, it’s your auto lender that cares how big your down payment is, not the dealer. Having money to put down can tell a dealership that you’re a serious shopper, but they don’t need to know how much of a down payment you have. We also explore the benefits of having a big down payment, and how it can help you get approved for a car loan if you have bad credit.
Down Payments and Car Dealerships
Telling a dealer that you’re ready for a vehicle and that you have a down payment prepared is a good way to show them that you’re serious. Shoppers who come into a dealership who look like they’re just window shopping may not get as much attention. Time is money!
However, the dealer isn’t likely to be concerned with the amount of money down you have – at least, not as much as your lender. Since traditional dealerships aren’t the ones that finance you, your lender is the one that’s going to discuss loan terms with you and whether or not you need a down payment.
Borrowers with less than perfect credit are often asked to have money prepared to put down to get into a car. If you work with a subprime (or bad credit) lender at a special finance dealer, they’re likely to ask you to have a down payment of at least $1,000 or 10% of the vehicle’s selling price. Of course, you can put down as much as you’d like, as long as you meet the minimum requirement!
Big Down Payments on Auto Loans
Having a large down payment can increase your approval odds for an auto loan because you need to finance less. Additionally, putting a lot of money down lowers your interest charges.
The more you need to borrow from a lender, the more you have to be charged interest on. Car loans are usually simple interest loans, which means you’re charged interest on the remaining balance of your loan. This also means that the quicker you pay the vehicle off, the less you need to pay in interest charges.
Lowering your interest charges when you have bad credit should be at the forefront of your mind. Borrowers with poor credit tend to qualify for higher interest rates, but down payments can help alleviate those charges.
Putting money down may allow you to decrease the length of your auto loan, too, since they can make shorter loan terms more manageable. No matter what your credit score is, a down payment on a financed car is a great way to make your auto loan more manageable and save you money over the course of it.
Bad Credit Car Loans
Having a down payment prepared is one thing – finding a dealership that has the resources you need to get into your next car loan is another thing entirely.
Not every dealer is signed up with subprime lenders, and finding one that is can mean driving all over town hoping that you do. Instead of wasting time and effort, start right here with us at Drivers Lane.
We’ve already done the legwork of finding dealerships that are signed up with subprime lenders, and we want to match you to one in your area. Begin by completing our free auto loan request form, and we’ll look for a local dealer with bad credit lending options.