Car buyers with bad credit often look for a way to get a car loan without a down payment. With all the advantages that come with putting money down on a car, you'll be better off with a take-charge approach. Take this question we received last month:

"I'd like more info about the process. I do not have a down payment ready quite yet. How much generally would I need down for say a $15,000-$30,000 loan? Thanks!"

How Much Money Down Do You Need on a Car Loan?

This consumer has the right mindset: they're preparing their car buying plan of attack in advance. Saving for a down payment is a great way to set your auto loan up for success, but how much will you need?

This consumer wants to know how much they'd need for a loan in the $15,000-$30,000 range. If they're dealing with less than perfect credit, this person can expect to need around $1,000 for a down payment. Here's why:

When it comes to special financing, lenders typical require borrowers to make a down payment of $1,000 or 10 percent of the car's selling price, whichever is less. Because 10 percent of $15,000 is $1,500, many subprime lenders would only require $1,000 down (the lower number of the two).

However, keep in mind this is only the minimum amount you're expected to have. In fact, the bigger your down payment, the better off you'll be thanks to all the advantages that come with making one.

Reasons Why You'll Want a Down Payment

money bags, down paymentThere are many benefits that come with making a down payment, including:

  • Helps Your Chances of Getting Approved – A down payment is typically required for consumers who're dealing with credit issues, but it also lowers a vehicle’s loan to value ratio. Learn more about how lowering this ratio can help you get approved here.
  • You Save Money in the Long Run – Putting money down up front means you borrow less money. When your loan is smaller, your monthly payments are too. More importantly, borrowing less reduces the amount you end up paying in interest charges.
  • The Option for a Shorter Loan Term – Instead of reducing the monthly payment, you may be able to keep payments in the same ball park while reducing the loan term. A shorter loan will result in lower interest charges.
  • Build Equity – Vehicles depreciate in value, and it can be a problem when you owe more on your loan than your car is worth. A down payment helps build equity and reduces the length of time you're upside down.

Got Your Down Payment? Find a Dealer

For all the advantages that come with it, we think it's a good idea for consumers to prepare a down payment for their car purchase. If you're dealing with less than perfect credit, it's also wise to locate the people who can help you find a loan.

At Auto Credit Express, we help car buyers work through their credit issues by setting them up with local special finance dealers. The dealerships in our nationwide network know what it takes to help consumers get financed. Start the process by filling out our secure and free auto loan request form today.