If you have good credit, you're often able to buy a used car with no down payment in Los Angeles without a problem. But if you have bad credit and need an auto loan, you should know that a down payment is often a requirement for getting approved. It isn't always easy coming up with the money to put down, but a down payment helps you in many different ways.
Car Loan Down Payment Requirements
Since you typically need to put money down when you have bad credit in Los Angeles, you should know what the down payment requirements are ahead of time.
Subprime lenders – the type who are willing to work with borrowers with poor credit – generally ask for a minimum of $1,000 or 10 percent of the vehicle's selling price, whichever is less. Keep in mind that this can vary depending on the programs a particular lender offers.
The down payment requirement at in-house financing dealerships, such as buy here pay here lots, varies more widely. While one is almost always required, the amount needed differs because these places are often independently operated and base it on the car you choose.
How a Down Payment Helps
Did you know that a down payment makes an auto loan more affordable? It’s true, having one lowers your monthly payment and reduces the amount of interest charges you end up paying over the course of the loan.
Even better, you don’t have to only use cash. If you have a trade-in, you can also use trade equity, or a combination of both cash and trade equity, to make your down payment even larger.
While it’s okay to put the minimum amount down, bigger is better. Not only does your loan amount decrease, you limit the time you spend upside down (when you owe more on the vehicle than it’s worth), and increase your approval odds for bad credit car financing. At the end of the day, it’s a win-win situation for both you and the lender when you make a larger down payment.
Looking for a Dealership in Los Angeles?
If you have bad credit in Los Angeles, make sure you have a down payment ready to go when buying your next used vehicle. Once you do and you feel confident about buying your next car, we want to help you find financing.
Auto Credit Express works with dealers all across the country that have the lending resources available to help people who have bad credit, including those in Los Angeles and the surrounding area. Find a local dealership that's a good fit for you by filling out our simple and secure auto loan request form today!