No Money Down Programs
Consumers with bad credit would be wise to act as if the term "zero down car loans" doesn't exist. This is because virtually every subprime lender has a down payment requirement these days. So, if you're trying to finance a car with bad credit, expect to be asked to provide a down payment.
Subprime lenders are those who are able to approve those with damaged credit. Yet, they still have qualifications that must be met and one of those is often a down payment requirement.
The subprime standard down payment requirement is 10% of the car's price or $1,000, whichever is less. Your down payment can be cash or trade-in equity, or any combination of those two.
With Second Chance Acceptance we know this because we have been helping borrowers with bad credit find auto financing for over two decades. This has given us unique insight into why these lenders operate the way they do.
The reasons they typically require credit-challenged borrowers to have a down payment are straightforward. Lenders see a down payment as a way to increase the chances of you making regular and timely loan payments.
Think of it this way: making a down payment is putting your own money on the line. It'd be much easier to walk away from a loan if you didn't have any money invested in the vehicle. But you'd surely be less likely to do so if you've put your own money into the car.