Down Payment

Your trade-in can be used as a down payment on your next car loan. As long as there’s equity, you shouldn’t have an issue trading in your current vehicle.

It can be tempting to jump into the car buying process, but it can pay off in the long run to take a step back and really prepare for the task at hand – especially when it comes to saving up a down payment for a car. Here's where your money goes, and why a down payment is a big helping hand when you have poor credit and need a car.

You'll almost always need to make a down payment on a bad credit auto loan. Just how much you’ll need depends on the lender’s requirements and the vehicle you choose. So, how do you save for a down payment on a car?

If you have bad credit, it can be tricky getting approved for a traditional car loan. But, when you work with the right lender, the process goes more smoothly.

Your down payment plays a role in determining the size of your monthly payment and how much you end up paying overall, so the decision as to how much money you should put down isn't easy. Let's look at some of the pros and cons of a large down payment on an auto loan.

Typically, the larger the down payment, the better off you’ll be. While a large down payment can help your loan, it doesn’t necessarily offset your bad credit.

You certainly can use your trade-in as a down payment. In fact, it’s highly recommended you do so if you’re looking to save money on a new car loan and have equity in your trade-in.

Finding the ideal car loan down payment can be a challenge. How much you’ll need to put down depends on the lender’s requirements as well as your own finances.

If you have strong credit and make a qualifying income, you may not be required to make a down payment when purchasing a car. With bad credit, however, you can expect the lender to ask for a down payment.

Realistically, if you have decent credit, it’s not unheard of to make a $500 down payment. If you’re dealing with bad credit, however, you should expect to put down more. Sure, $500 down may get you financed, but the value of a down payment can be so much more.