Can I Get Down Payment Assistance for a Bad Credit Car Loan?

Get Car Financing
Even with poor credit.

By

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, - June 18, 2019

When you need help meeting the down payment requirement an auto lender asks for, you have a few options, but a loan isn't one of them. Let's take a closer look at what your down payment requirement might look like, and how you can prepare for it.

What Is a Down Payment?

When you take out a car loan, lenders base your approval in part on your credit score and the information in your credit reports. Generally, lenders base things like the down payment amount on risk – the lower the credit score, the higher the down payment typically is. Of course, the amount needed varies by lender.

When you provide a down payment, it shows the lender that you're serious about getting a loan, and that you're willing to invest your own money to do it. But a down payment isn't just good for the lender. In reality, the bigger the down payment, the less you have to borrow.

This means more savings down the road because the less you borrow the more money you save in interest charges over the term of your loan. If you can't make a larger down payment than required, however, don't worry – as long as you can meet the lender's minimum requirement you're good.

Making the Required Car Down Payment

While it's true that down payment amounts vary by lender, with most bad credit auto loans, lenders ask for a minimum of $1,000 or 10% of the vehicle's selling price, whichever is less.

This may sound like a lot, but the good news is that you don't always have to come up with $1,000 in cash. In fact, there are several options to meeting a down payment requirement.

Down payment options include:

  • Cash – You can make the required down payment in cash. This is known as having some skin in the game, and typically people who invest their own money are more likely to successfully complete a loan.
  • Trade-in equity – If you don't have the required amount in cash, you can also use any equity in your car. As long as the actual cash value of your vehicle is worth more than the balance on your loan, there's equity in your car.
  • Both – When making a down payment, a third option of combining both cash and trade-in equity exists. So you can use any form of this – no matter if there's more cash or more trade value – and still make the required down payment.

If you can't come up with the required amount using any of the options listed above, you may have one other option available to you: put your down payment on a credit card.

This option isn't available to everyone, and there's no telling if your lender allows this. If you do put your down payment on a credit card, make sure that it's worth your while, because you aren't going to save any money this way. Instead of only paying interest on the amount you borrow through your auto loan, you're now paying interest to your credit card company for your down payment as well.

The Bottom Line

Though you can't use another loan as assistance for a car loan down payment, you do have options in how you choose to pay it. Be sure to check with your lender for specifics about how much you're required to pay, and what forms of payment they accept.

If you're still having trouble finding a lender due to a bad credit situation, we want to help. Here at CarsDirect, we help credit challenged people find the local dealerships that work with the right lenders to get them the loans they're looking for. Don't wait any longer, just fill out our easy and free online auto loan request form today, and we'll get started matching you to a special finance dealer in your area!

Need a Car Loan?

It only takes a minute.

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


Loan approval is not guaranteed and is subject to credit application and approval of the lender. Individual loan terms may vary. Use of this website constitutes acceptance of CarsDirect.com's Terms of Use, Disclaimer, Privacy Policy, and Cookie Policy.

Privacy Policy|Terms of Use|Cookie Policy|Disclaimer
COPYRIGHT 1999-2019 MH Sub I, LLC dba CarsDirect.com