Los Angeles is full of glitz and glamour, but there are millions of regular people who live in the surrounding area, too. If you’re one of many residents struggling with credit, you may be wondering if it's possible to get a car loan with no money down and bad credit in Los Angeles. No matter where you go in LA to finance your next vehicle, you're likely going to need a down payment if you have bad credit, but the minimum requirement is usually modest.
Bad Credit Auto Loan Down Payment Requirements
When dealing with bad credit auto financing in Los Angeles, the two types of dealerships you have the best chance of getting approved at are special finance dealers and buy here pay here (BHPH) dealerships. Both extend financing to those dealing with credit challenges, but they also have requirements you must meet. One of these is typically a down payment.
Special finance dealers work with subprime lenders. These third-party lenders offer bad credit car financing, but their requirements are a bit more extensive than those of a traditional lender. They usually require borrowers with bad credit to put money down. Their down payment requirement is generally $1,000 or 10% of the vehicle's selling price, whichever is less, but this can vary from lender to lender.
Buy here pay here dealerships are a type of in-house financing dealer, which means they're also lenders and finance the cars on their lots themselves. A down payment is almost always required to get approved for one of these loans. However, the typical amount required is much more varied. They generally base their down payment requirement on the cost of the vehicle you choose, and it's common for it to be steeper than those of subprime lenders at special finance dealerships.
Coming Up with a Car Down Payment
Now that you have an idea of the down payment requirements for these types of dealers and lenders, you should know that you have three options to come up with one:
- Trade-in equity – If you currently have a car that’s paid off or worth more than the loan balance, then you have equity in it. You can use that equity toward the down payment by trading in your vehicle and apply its value to your next loan.
- Cash – You can make the down payment in cash.
- Combination – You can combine the two and use both trade-in equity and cash.
Auto Credit Express Tip: If you have bad credit, making the largest down payment you comfortably afford can help you save a lot of money in the long run. A down payment decreases the amount of interest charges you pay, which can make a big difference if you get a higher than average interest rate as a result of poor credit.
Find a Car Dealer in Los Angeles
Don’t be afraid of the down payment requirement. Putting money down helps you get approved and makes your auto loan more affordable.
If you're looking for a dealership in Los Angeles that can get you a car loan with poor credit, Auto Credit Express can help. We're teamed up with nationwide network of dealers that specialize in bad credit car loans, and we want to connect you to one near you. All you need to do to get started is complete our free and quick auto loan request form.