When you’re financing a vehicle, a down payment is often a requirement. If you have bad credit, having a down payment is typically a must-have. But just how small of a down payment can you get away with?

Down Payment Sizes on Auto Loans

“Small” is subjective in terms of lending, and how big of a payment requirement you’re likely to face is largely determined by your credit, the vehicle you want, and your lender. While small and big are subjective, lenders are likely to consider a down payment less than $1,000 as small.

Hand holding a tiny dollar bill. Most auto lenders that assist bad credit borrowers require either at least $1,000 or 10% of the vehicle’s selling price as a down payment. The pricer the car you’re looking to get, the more you're typically expected to bring to the table up front. Lenders may allow borrowers to meet just 10% of the vehicle’s selling or the cash down requirement, depending on which is less.

If you want a $10,000 vehicle, then $1,000 is usually considered a decent down payment size. A smaller down payment, under $1,000, for a car more than $10,000 may not be enough to qualify you for a car loan if your credit score is less than perfect. As a good rule of thumb, count on needing at least 10% of a car’s selling price.

Can I Put Less Than $1000 Down?

A down payment requirement with poor credit under $1,000 isn’t impossible, since all lender requirements vary, but it wouldn’t be something to count on. However, keep in mind that down payment requirements don’t have to be satisfied with cash alone, because trade-in equity can be used to meet the requirement alongside cash or even by itself.

If you only have $500 or less to put down on a car, you may be able to get into an inexpensive, used vehicle. However, realistically, if you want something more than $10,000 and your credit score isn’t great, then you may have to use some trade-in equity or save up some more cash to be eligible for bad credit vehicle financing.

Small or Big Down Payment on a Vehicle?

“More is better!” may be something to abide by when thinking about how much to put down on a vehicle, especially when you’re more likely to qualify for a high interest rate on a car loan. However, you don’t have to go broke.

As we said, most lenders are likely to expect at least 10% down on a used car. For new vehicles, you may need 15% to 20% down to meet a lender’s requirements. And the more you put down on a vehicle at the start, the lower your monthly payment, and the more you can save in interest charges.

It’s often recommended that you put down as much as you can reasonably afford, without completely draining your savings/safety net. A larger down payment could also increase your chances of qualifying for a car loan, too, since you’d be lowering the amount you need to finance and increasing your chances of successfully completing the loan.

Need a Bad Credit Auto Loan?

It’s not always easy to find a lender that’s able to assist with credit challenges. Even if you’ve saved up a decent down payment, sometimes your credit score is what gets in the way of your car loan chances – but Auto Credit Express wants to help.

We’ve created a coast-to-coast network of dealerships that are equipped to assist bad credit borrowers in getting the auto loan they need. Fill out our free car loan request form, and we’ll look for a special finance dealership in your area.