If you live in Sacramento, are on a tight budget, and need auto financing, can you qualify for a zero down car loan? If you have excellent credit, you may be able to qualify for a zero down auto loan, but with interest rates rising, even that may be a challenge. If you have bad credit, the harsh reality is that you most likely aren’t going to qualify for zero down, but the good news is you don’t have to make a substantial down payment to get approved for a car loan.

How a Down Payment Can Help You

Making a down payment may feel like a waste at first, but if you’re looking for a bad credit auto loan in Sacramento, you should know that a down payment can actually help you out in the long run.

You must make the minimum down payment required by the lender, but if you can, we recommended putting down more. The larger the down payment, the more you end up saving – and if you’re dealing with a higher than average interest rate, this can really help you.

Not sure how this works? Let’s take a look at an example: Aaron lives in Elk Grove, his credit isn’t great, and he’s going to buy a vehicle that sells for $13,000 and finance it for 60 months. He’s been approved at an interest rate of 18 percent, and has a trade-in worth $1,500. Here’s how different down payment amounts affect his car loan (calculations don’t include tax, title, and license fees):

 Down Payment Amount 

 Monthly Payment 

 Total Interest Paid 




$1,000 (Minimum Requirement)



$1,500 (Trade-In Amount)



$2,500 (Trade-In Amount Plus $1,000)



Bad Credit Auto Loans and Zero Money Down

Sacramento Zero Down Auto LoansWhether you choose to go to a buy here pay here (BHPH) dealership or special finance dealership for auto financing in Sacramento, you’re going to run into the same issue: you typically must make a down payment to qualify.

Just how much you need to put down varies by lender. Most subprime lenders ask for a minimum down payment of $1,000 or 10 percent of the car's selling price, whichever is less, but, again, this varies.

BHPH dealers, on the other hand, tend to ask for a larger down payment to help cover the cost of the vehicle. This could be over 20 percent, and if you don’t have the cash or trade-in equity the down payment, you may be out of luck. Make sure you ask ahead of time about the needed down payment amount before you get too far into the car buying process.

The Bottom Line

Zero down auto loans are usually a fantasy for consumers with bad credit. It can be a hard pill to swallow, but you can take steps toward saving up for a down payment ahead of time and make your car loan more affordable at the same time. Once you get approved, make on-time monthly payments, and get your credit score up, you may be able to refinance for a lower interest rate and lower monthly payment.

At Drivers Lane, we know how tough it can be to find bad credit auto financing when you’re on a tight budget, but we can help you get the process started. No matter where in the Sac you live, we want to connect you to a local dealership that has the lending resources you need. Get started today by filling out our free and easy car loan request form.