If you have bad credit and are on a tight budget, finding an affordable car loan can be tough. You usually have to make a down payment when taking out a bad credit auto loan. It may be possible to find a $500 down car, but you may be required to make a slightly larger down payment, depending on the lender's requirements. However, you should be aware that a larger down payment helps you save money.

Where Can I Get a $500 Down Car Loan?

$500 Down Car Lots for Bad CreditFrequently, consumers ask us where they can get a $500 car loan if they have bad credit. Not many dealerships offer low down payment options for bad credit, so the key is to apply with a subprime lender.

These lenders offer loans through special finance dealers, and they know how to handle unique credit situations. We can help you get connected to one of these dealerships near you, but first let’s explain what subprime lenders look for in a down payment.

Generally, subprime lenders ask for a minimum down payment of $1,000 or 10% of the vehicle’s selling price, whichever is less. This means if you decide to finance $5,000, it’s possible you may only need $500 to meet the down payment requirement.

Why You Should Make a Larger Down Payment

The minimum down payment requirement helps you qualify for a bad credit auto loan. You can put $500 down if it meets the requirement, but we recommend that you make the largest down payment you can comfortably afford if you have less than perfect credit.

The reason why is because you end up saving more on the overall cost of the loan. When you make a larger down payment, you decrease your total interest charges and lower your monthly payment.

Let's look at an example to see how this works in action: Billy has bad credit and is taking out a subprime car loan. He finds a dealer to work with through Auto Credit Express and takes out a $8,500 loan at an interest rate of 16% for 48 months (four years).

Without tax, title, and license fees or insurance costs factored in, here’s what his loan would look like with different down payment amounts:

  Down Payment 

  Monthly Payment 

  Total Interest Paid 




$850 (10%)



$1,700 (20%)



As you can see, Billy makes his auto loan more affordable by putting more money down. A larger down payment enables him to save hundreds of dollars in total interest charges, which is a big deal if you have bad credit and receive a higher than average interest rate.

Need Help Finding a Dealership?

Is it possible to find a $500 down car lot? It sure is, and Auto Credit Express wants to get you connected to a dealership in your area.

For over 20 years, we’ve been helping bad credit consumers find financing by matching them with local dealers that have the right lending resources. To get started, simply fill out our free and easy auto loan request form today!