Financing a New Car with No Down Payment – Possible?July 25
Can you really buy a car with no money down? Yes, you can, but it may cost you a lot of money in higher interest charges. In today’s economic climate, there are many people who have bad credit or no money for a down payment that still need to buy a car. How do they qualify for a loan to buy a car with 0 down? Here’s how:
1) A trade-in allowance for you current car can often qualify you for a loan on a different car with no money down. If your trade-in doesn’t have enough value to qualify you for a new car loan, the dealer may ‘give’ you more value for your trade-in, but then roll the difference it the loan. This will cost you more in interest charges in the long run, but it effectively allows you to secure a zero down car loan.
2) Factory rebates may be enough to meet the down payment requirements for some auto loans. To qualify for these loans, you may need a good credit score and/or a good employment history. These are usually only for new cars, and not everyone will qualify.
3) As a last resort you may have to use a lending agency that specializes in bad credit and/or no down payment situations. They will approve you for the atuo loan, but at high (28-35%) interest rates. This will allow you to buy a car, and in a couple of years, if you have built up a credit history and some equity in the vehicle, you may be able to refinance with a conventional auto lender at a reasonable interest rate.
25 Jul 2010 | 11:09 am | Automotive
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