Pay Little Or No Money Down For Bad Credit Auto Financing In 5 Steps

By Everett Maclachlan

You deserve a car. No, maybe “need” is a better word. These days, it is hard to get almost anything done without one. Sure, there are buses, bicycles, and trains for getting yourself around town – and these work for some people – but most of us need a car to get by.

The challenge of getting your own set of wheels through auto financing comes when you have a bad credit (FICO) score due to past bad decisions. Or, maybe you just had a run of bad luck such as the loss of a job or the inability to make your mortgage or car payments.

And, another potential roadblock in qualifying for financing a car is when you lack sufficient funds to offer as a down payment for your loan. You probably have been told by more than one lender: no down payment + bad credit = no car loan.

Fortunately, there exist bad credit auto lenders who specialize in working with bad credit individuals. In fact, some have built up their entire business around the concept that people with a poor credit rating still deserve a car.

If you would like to pay little or no money down for bad credit auto financing, here are 5 steps to doing so:


1. Find a car to buy that is suitable to your situation:

You need to start your journey to getting approved for car financing by getting realistic about the type of car you can afford right now. As you can imagine, it will slant the odds of getting your loan approved in your favor if you choose to buy a lower-priced car that will require you to take out a much smaller loan. Look for something nice, but find the lowest-priced car you could be possibly happy with at this point in your life.

2. Get together whatever money you can manage for a down payment, if any:

You are no doubt short on funds, but any cash you can get together for a down payment will improve your odds even further. Even offering just a few hundred dollars as a sign of good faith can show your lender than you have every intention of sharing the risk of this vehicle loan with them.

3. Peruse your latest FICO report and fix any issues you find there:

Next, you will want to set your sights on apply for auto financing. In preparation for that, have one (or all three) of the major credit monitoring agencies pull your credit report. Then, peruse it carefully, line by line, while looking for any errors or mistakes. If you find any, write a formal letter of protest to the respective agency and get it fixed.

4. Build yourself a list of bad credit auto financing lenders:

Now it is time to get some particular lenders in mind so that you can apply for a loan. You will want to search for “bad credit auto financing lenders.” These are the ones who specialize in working with people in your situation.

5. Apply to at least 4-5 lenders before signing any contracts:

Make sure your list contains at least 4-5 names of good, reputable companies. Then, start applying. Make sure to ask for the same size (amount) of loan, as well as the same repayment terms (for example, 5 or 7 years) from each one. That way, you can easily compare quotes to see which is the best deal for you.

Take these 5 tips into account as you qualify for bad credit auto financing with little or no money down.

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