How much money you need for a down payment on a car loan in Seattle varies by lender. Even if you have bad credit, you typically don't need a big down payment, but you may be required to make a modest one. Let's look at the typical down payment requirements, and things you should consider when making one.

What Are Down Payments Based On?

Do I Need a Big Down Payment to Buy a Car in Seattle?Typically, down payment requirements are based on your credit and the cost of the vehicle you're financing. The better your credit, the more potential you have for a low down payment or even no down payment with a Seattle-based lender.

With poor credit, you're likely to see a required down payment. However, lenders that deal specifically with bad credit, called subprime lenders, tend to have a set standard for what they require a borrower to pay. Generally, the amount is $1,000 or 10% of the car's selling price, whichever is less.

Often, financial experts recommend that you make the largest down payment you possibly can. This is in order to offset depreciation, and put you in an equity position as soon as possible. Sometimes, though, making a down payment that's larger than required doesn't make sense.

How Much Should You Put Down?

It's true that a larger down payment does make it easier to recover from negative equity sooner. It also means you borrower less, and, therefore, pay less in interest charges over the course of your loan. This is all well and good, but if you're purchasing a reliable, affordable used vehicle, it may not be necessary.

What other times does it make sense for Seattleites to pay just the minimum required down payment? Two valid reasons are if you're financing a car that really holds its value, or if you're purchasing GAP insurance. GAP insurance covers the difference between the vehicle's value and how much you owe on the loan, should something happen to it.

Ways to Make Your Down Payment

Did you know that a down payment doesn't have to be made just in cash? In fact, if you're trading in a car with equity, you may not need to put down any cash, depending on the amount of equity you have.

To find out if there's equity in your vehicle, simply get an appraisal from a local Seattle dealership, and subtract the appraisal from the amount you owe on your loan. You may need to get a payoff amount from your current lender to find out exactly what you owe.

The difference is the amount of equity, or negative equity (if you owe more than the car's worth), you have. If you own your vehicle, the actual cash value of your car is all equity.

In all, there are a few options for making your down payment in the Emerald City:

  • Cash – When you're financing a vehicle, you can make your down payment in cash. Remember, the exact amount you need varies by the lender you're working with, the car you choose, and your credit.
  • Trade-in equity – If there's enough equity in your current vehicle, you can use it as your down payment.
  • Combination – If the equity in your car doesn't cover the down payment requirement, or if you'd like to make a larger down payment, you can combine your trade-in equity with cash.

The Bottom Line

Remember, Seattleites, bad credit shouldn’t always stop you from getting an auto loan, but there are certain requirements you have to meet in order to get approved, such as a down payment.

If you're ready to get the ball rolling on your next car buying journey, you've come to the right place. Auto Credit Express works with a network of special finance dealers all across Seattle, and the rest of the nation, that has the special finance lenders needed to get a bad credit auto loan.

Simply fill out our easy, fast, and free car loan request form, and we'll match you to a local dealership that can help! What are you waiting for? Get started right now!