Often times before a person with poor credit can get auto financing from a car loan company they may be asked to provide a good down payment for some of the initial cost of the vehicle, but how can you tell if you're paying too much upfront?
This is a question that we have heard from multiple consumers and we want make sure that you are aware of how paying no down payment auto loans with bad credit can help you get approved, and just how much you should offer to guarantee a car loan.
When a person starts the auto financing process the most important question a seller will pose to you is "how much of a down payment are you willing to make today?". Most buyers mistake this as an open question where any amount is considered acceptable, so they either allow the dealer to decide or unknowingly low ball them instead. It may be seen as unfair, but the amount you decide to make as your vehicle down payment can essentially determine whether you walk off the lot or drive off in your newly purchased automobile.
To make sure that you don't draw the short straw in this situation it is a good idea to pay about 20 percent of the initial cost of the vehicle you're considering when you apply for a car loan with low credit. By offering a 20% down payment you are able to take care of the deprecation for the first year of your car loan, and essentially not being "upside down" on financing as well.
Finding yourself immediately upside down with bad credit car loans is one of the most costly predicaments that you can find yourself in as a car buyer, especially if you want to trade that vehicle in later down the road. This is because without a down payment made on an auto loan you essentially have negative equity on a car which will require you to pay additional funds during a trade-in.
Placing money down on a new or used auto will also prove to a lender that you have the income and employment status to meet the monthly payments that they will have set in place. This is an important quality to have for people who need auto loans for bad credit as the ability to make timely payments can often overshadow past credit problems.
Here at AutoNet Financial we help provide private party financing opportunities for people with bad credit that earn over $1,500 per month, regardless of how long they have been on the job. We also offer helpful advice on local loan companies, credit monitoring and repair, and best financing practices that well help you finance a great automobile.