If you’re on a budget and can only afford a $500 down payment on a used car, is this possible? It might be in some cases, as bad credit lenders typically base the down payment requirement on the price of the vehicle being financed. However, depending on the situation, it's very possible for the requirement to be more than $500.
Down Payment Requirements
Before we connect you to a local special finance dealership that can help borrowers with bad credit, you should know what subprime lenders expect. Regarding a down payment, most subprime lenders require you to put down at least $1,000 or 10% of the car’s selling price, whichever is less.
This means that if you finance a vehicle that costs $5,000, you may only need $500 to meet the minimum down payment requirement.
However, the down payment is just one piece of the puzzle when it comes to getting approved for a bad credit auto loan. You have to check off all of the lender's boxes in order to qualify. This typically means you must also meet the income, employment, car, and loan requirements, which vary from lender to lender.
Can Buy Here Pay Here Dealers Help?
Buy here pay here dealers are another type of bad credit lender. These dealerships offer auto loans in-house for the used vehicles on their lots. It's fairly easy to get approved for financing at this type of dealer, since the majority of them don't even check your credit.
Instead, they base loans on your income, and you're also typically expected to provide a down payment. The money down requirement at buy here pay here dealerships is a lot more variable, and it's not uncommon for them to ask for a larger down payment compared to subprime lenders.
However, they also usually base the money down requirement on the price of the car you're financing. This could mean that you only need $500 down, but it depends on the vehicle you choose. The only way to know how much you need is by asking the dealer.
Finding a $500 Down Car Lot
If you’re looking for a $500 down car lot, you could drive around town visiting multiple dealerships only to get turned down for a loan. Or, you could skip the hassle of trying to find financing on your own and let Drivers Lane connect you to a local special finance dealer.
We work with a large network of dealerships that work with lenders that can help people with bad credit, no credit, or even bankruptcy. Don't hesitate any longer! Just fill out our easy, fast, and free auto loan request loan form now, and we'll start the search for you!