How to Buy a Car With No Money Down and Bad Credit

No matter how it happened, you may find yourself dealing with a low credit score. A low credit score can make it difficult to purchase a car. By working to optimize your credit and improve your overall standing, you can put yourself in a better position to purchase a car with no money down. Furthermore, by exploring a variety of financing options, you can improve your chances of getting the car loan you seek

1

Try to get a loan through your credit union. If you already have an account at a credit union, it is a good idea to inquire there about loans first.[1] Credit unions are generally more lenient with their qualification requirements than other banks, especially in regards to their members. If you are not a credit union member, join a credit union and ask about auto financing for problematic credit.[2]

In order to open a credit union account, you will need a government issued I.D. and a minimum deposit. This amount will vary by credit union, but may be as low as $25.

Once your account is open, speak to a loan representative about auto financing options.

They will likely be able to tell you that same day whether or not you are approved and for what amount.

Bring your loan approval letter to the car dealership, who will deal directly with the credit union.

2

Seek out a loan through a dealership. Find an auto dealership that specializes in used cars and bad credit financing. These are often referred to as "buy here pay here" lots. This type of dealership may approve a car loan for you with little to no money down, but be prepared to pay a high interest rate.

• Many of these dealerships can approve you over the phone. They can also sit down with you in person.
• You will need to verify your identity by providing a social security number, birth date, and other information (such as previous addresses).
• It is a good idea to call and see if you are approved before you begin shopping for cars.

3

Explore loan options through "sub-prime lenders." "Sub-prime lenders" specialize in loaning money to those with damaged credit. An Internet search will return numerous sub-prime lenders, and you can often fill out an application online and have an answer within minutes. Once again, be prepared to pay a high interest rate.[3]

You will need to provide identifying information such as your social security number, birth date, and previous addresses.

You should be able to apply for a loan and be approved within 20 minutes.

Bring your loan approval letter to the car dealership, who will deal directly with the sub-prime lender.

Your interest rate will vary depending on the lender and your credit score, but there are usury laws at the state level that stop lenders from being predatory.[4]