When you have bad credit, you’re typically required to put money down when taking out an auto loan. How much of a down payment you need on a bad credit car loan depends on the lender's requirements. However, you should know that putting money down helps you save in the long run.

Bad Credit Auto Loan Down Payment Requirements

How Much Down Payment Do You Need with a Bad Credit Auto Loan?First, let’s look at what different lenders may require for a down payment. Because you have bad credit, you generally need to apply with either a subprime lender or buy here pay here dealership, as they specialize in financing borrowers with unique credit situations. Both types of lenders usually require a down payment, but the amount varies.

Subprime lenders generally ask for at least $1,000 or 10% of the vehicle’s selling price, whichever is less. Buy here pay here dealers typically base the minimum down payment needed on the car you choose, so it varies more widely.

You can use cash, trade-in equity, or a combination of both. The more money you put down, the more you save over the loan term.

How a Larger Down Payment Saves You Money

A larger down payment helps you save money because it lowers the amount you have to borrow. This results in both a lower monthly payment and a lower overall cost because less interest charges accrue. Let's look at an example to see this in action:

Steve is taking out a $15,000 bad credit auto loan with a 15% interest rate for 60 months. He has a trade-in worth $3,000, but wants to know if adding cash is worth it. Here’s how different down payment amounts affect Steve’s car loan:

  Down Payment Amount 

  Monthly Payment 

  Interest Paid 

$1,000 (typical minimum)



$3,000 (trade-in amount)



$4,000 (trade-in plus $1,000)



If Steve simply wanted to trade in his vehicle and use the equity toward the down payment, he could. However, if he adds an extra thousand dollars on top of that, he saves even more.

Ready to Get Your Next Vehicle?

Now that you know how much money down you typically need and how it helps you save money, it's time to find a dealership to work with. Auto Credit Express can point you in the right direction if you're dealing with imperfect credit.

We work with a nationwide network of special finance dealers, and we want to connect you with one near you. Simply complete our free and secure auto loan request form, and we’ll get right to work for you!