You've all heard them. The assertive radio announcer blaring through the loudspeaker or radio almost yelling the words, "No Money Down! Drive home today in a new car with zero down payment!"
It's sound good, but is it?
The following article will expand upon our no down payment car loan page and explain everything you need to know in order to make an informed decision.
Nothing comes free, but if you want to know about getting a car with 0 down payment, there is a way to do it!
There are lenders across the country who understand how tough it can be to get funding for a car loan and to get people to trust you. When you have bad credit, banks may pass you up for a less risky client.
But that's not true of all car loan and poor credit auto refinance companies.
There are alternatives such as a no down payment auto loan that allow you to be matched with a lender to get you an affordable interest rate even for bad credit loans.
If a zero down car loan is what you are looking for, we can match you with a lender who can give you an affordable interest rate even if the financing is for a bad credit auto loan.
Valley Auto Loans can find you no down payment car loans quickly and efficiently so that you can get on the road in your new vehicle fast.
So you're on a budget? Who isn't? Valley Auto Loans can make sure that your payments will fit your budget requirements so that you never have to go over the limit on your due date.
Even better than that, you can apply right on your smartphone and get a decision fast so that you will know what you qualify for.
How to Find The Best No Down Payment Car Loan
Sometimes what you need to find the best car loan is a middleman or an auto loan broker. Brokers, just like in the insurance market, are a go-between between you and the O down payment car lender.
They can plead your case and show what you can afford. When they show your budget to a potential lender, the lender is more likely to work with them to get you the best loan for your money.
That's because they have some assurance that you'll be able to pay it when they know what your budget is.
Networking Is Our Specialty
Another advantage of using Valley Auto Loans is because we have a good relationship with the no down payment car lenders.
We have several lenders that work with us and that is why we can almost guarantee a 100% acceptance for our auto loans.
With so many different loans and lenders to choose from, there is a no down payment car loan that is bound to fit your budget and needs.
What We Do
Some people mistakenly think that we are only a car sales business.
But really our primary function is to find you the best car loan that fits your budget. We do the homework for you once you apply and match you with the best lender.
This is a win-win situation for both of us!
How to Take Control of Your Auto Loan Obligations
Many people wince at the idea of applying for a new car loan because they think that they will lose control of their finances or their budget.
They are perhaps afraid that they won't be able to make the payments or that it will damage their credit rating further.
But actually, the opposite is true. When you deal with Valley Auto Loans, we match you with a lender that has terms you can live with and abide by.
Paying your loan on time will increase not decrease your current credit rating and make it easier for you to purchase a car next time.
We report to all the major credit bureaus and this helps build back your credit if it is bad or damaged.
Additionally, you're in a position to have some say in your finance terms when you deal with us because we can talk directly to the lender on your behalf.
How Can You Combat the High-Interest Rates?
While it is true that most auto car loans for bad credit have very high-interest rates, we have some control over the market because we deal with the lenders and can directly influence the terms we set up for you.
This can also affect the rate of interest and depending on how much money you can put down, you may be able to reduce your interest rate.
Another way you can control your interest rate and some of the other financial terms that you get is that you can look at a number of offers that we get for you and decide on the best one.
This puts more control in your hands for your terms and guarantees your success as you pay it back.
To start the process of obtaining a lender for your car loan, simply fill out our online application and put in the amount of down payment that you wish to pay.
Then we will take that information and start the process of negotiating the details of your contract.
We do all the heavy work so all you have to do is sit back and wait for us to call you with a deal. In many cases, we will have more than one lender that is willing to work with you so you can choose the one that fits your needs and budget the best.
How much more customized can it get than that?
Am I obligated to accept the offer?
Absolutely not! Though we try to find you the best deal possible based on your income level and budgeting needs and requirements, we will not be offended if you choose not to take any deal we offer you.
You can think about it and come back later when you are ready to make a deal or we can run it through again and see if we can find a better financial contract for you.
Zero Down Car Loan Advantages
Let's talk a minute about perceived versus real value. You may have heard some car lenders offer zero down financing but when you go in you discover that you have to have one of the highest credit ratings in order to even qualify for the zero down payment.
This makes it very difficult and if you do not qualify they will then charge you a huge interest rate.
Unlike most auto dealers who promise you the moon and deliver nothing, we are realistic in what we offer you.
If you have a bad credit rating you can get zero down financing with a lower interest rate because we have more lenders to choose from than those dealers who deal with only one finance company.
That is the difference between the perceived value of no advanced payment from traditional lenders and the better payment deals we offer you.
The truth is that most people who qualify for a no upfront payment loan could actually afford a down payment on a car.
On the other hand, people who do not have a good cash flow who do not qualify for traditional down payment loans would not be able to qualify for one without a high-interest rate.
We stop that ironic vicious cycle by offering bad credit clients a no upfront payment offer with a lower interest rate that we negotiate with the clients rather with the lenders.
When you deal with Valley Auto loan you get the best of both worlds.
What is the real value in zero down payment loans?
Unlike traditional lenders who offer trade equity in vehicle rebates as the pawn to use for a no down payment loan, we take you as you are with your credit even if it has some flaws.
Then we work with the lenders to get the best deal and work it into your contract. It may seem to be a slightly higher payment than you would normally pay but it's because you are also financing the down payment when you sign a deal with us.
What About Zero Down Auto Refinancing For Cash Back?
Some people run into problems with money later and decide they want to use the equity they have put into their car for cash back. You can only do this if your car has a significant cash value left in it when you refinance.
But it is possible to have a zero down payment investment in your automobile and still build up equity for cash.
This could be a viable alternative for a higher interest personal loan that you might have to take out when you need extra money.
Car Refinancing Facts For Zero Down Payment
When you refinance your car, and you want some equity value out of it, your car must have enough value to justify doing so. To figure out how much equity you have in your car, simply take the value of your car and subtract the amount you still owe.
This is your current equity value. You can have access to this cash when you refinance your car.
If you have enough equity in your current car, you can turn this into cash through refinancing then use that as a down payment towards your new vehicle.
If you do this you may have a lower overall payment because you were not financing your down payment since you will have already paid that in your cash back.
How can I lower my car payment?
Believe it or not, no money down car refinancing can lower your monthly car payments by extending your loan terms and allowing you to have more money back in your pocket.
When you get a great low payment car loan, you can use that to refinance your vehicle if you need cash later.
How can rebates help get better car deals?
Many auto sales businesses offer rebates for zero down car deals.
The dealer can apply for these or the customer can get a zero down payment car loan and use the rebate as a down payment.
This, in turn, will lower the overall cost of the loan since there is no initial payment to be figured in.
Calculating Real Value Over Time
The problem with buying a new car is that the car loses 20 to 25% of its real value the minute you drive it off the car lot.
By dealing with a used car instead of a new car, you can save 20 to 25% on average on the amount that you will pay back for the newer car.
The financing on a car that is even a few minutes old is going to be much less than one that is brand-spanking-new from the factory.
Even with a low or no payment car loan, you can come out ahead if you get a car that is slightly depreciated in value.
To take advantage of a cash back rebate with no payment you still get the advantage of having no initial payment.
When are zero down car payments bad?
When it comes to traditional loans that you get from the normal car dealer, it is best to remember the song "nothing from nothing leaves nothing."
You do not get something for free in this life no matter what you are or what you do. So stop expecting it.
When you have a 0 down payment in most cases, this is rolled into the loan you were going to pay at a much higher interest because you may be a more significant credit risk to these companies.
This is not the case at Valley Auto Loans because we can negotiate individual contracts based on your budget and credit rating.
If you have a great credit rating, it can certainly save you some interest but we can still find you a good deal that will not cost you more in the long run as is often the case with traditional dealers.
Learn to read the fine print
A "no initial payment deal" sounds great no matter where you're getting it but you need to learn to read the fine print. There are often clauses that you might not notice otherwise when you sign a payment agreement.
They may figure an extra high interest into your loan or hidden fees that you may not be aware of.
You might want to have a lawyer look over your contract before you sign it. Any car dealer that feels uncomfortable with you looking over the contract might have something to hide and you probably don't want to deal with them.
Don't buy the lies that some people tell you implying that they can give you something for nothing. It simply isn't true and you will pay for it, in the end, one way or the other.
Why are they offering it so cheaply?
Something else car buyers should consider is the fact that there is a reason sometimes as to why auto dealers are offering a no initial payment car loan.
Sometimes they want to move these cars fast and get them out of the way perhaps due to flood or hail damage or there's something else wrong with them. Be suspicious of deals that seem too good to be true because they usually are.
Do The Math
One simple way to find out whether you're really saving money with a car loan is to do the math.
Get the figures together from the car dealer that you wanted to deal with and find out exactly how much you will pay both ways with a deal as well as with a down payment.
You may be amazed at how much money you will add up with the interest when you make a payment loan.
That is not the case though Valley Loans because we deal directly with lenders who can work out a fair deal for both parties so that you know what you were getting before you sign and take your car away.
There will be no surprises when you deal with us.
0 Down Cars From Dealer Car Lots: Overview
People like to think that they are getting a good deal. That's why the "zero down payment" auto loans are so popular with buyers.
But if you stop and think about the idea of people with a bad credit history getting a good car deal with no money down, it just doesn't make sense.
The car dealership has to get its money someway and they have to ensure their property.
The car is not yours until you have paid it off. When you sign for a zero down payment auto loan, you are agreeing not to pay the portion of the payment they usually ask for upfront to let you have the car. When you forgo this, it ends up going onto the car loan terms, which can greatly increase your interest and overall payment amount.
Dealerships don't make money giving things away.
Like anything where you are offered something for free, someone has to pay for it. You are the one who will pay for it later as the car is depreciating in real value. Is that really the best deal?
The old adage, "Pay me now or pay me later" comes to mind here!
Coming Out Ahead
In an ideal world, if you could afford to do so, financial wizards recommend paying 20% of the price of the car at the time of purchase. But most people cannot afford to do that. They just don't have that much expendable cash handy.
That's why a zero down payment seems so appealing.
New Car Buying Guide
It's important to understand how the market works. Check out our new car buying guide to learn to recognize dealer scams and learn how to negotiate the best price.
Ideally, you want the best long term contract that offers the lowest interest rate so that your overall payment is lower.
But, if you do not have the money to spend on an expensive down payment, finding a zero down payment deal is best, provided it does not charge you more interest down the road.
People Who Need Zero Down Payment Options
There are many situations where people look for a zero down payment deal. Below are some of the situations you might find yourself in that may require no startup payment.
- Accident victims
- Low Cash Flow
- People Who Can't Afford a Down Payment
- Other Obligations
In all of these situations, a person may find that they are not able to afford a costly down payment. Since the recommended down payment is around 20% of the total cost of the car, you could be looking at a payment of around $6,000 in many cases if you are purchasing a new car in the neighborhood of $32,000.
This is a huge amount that most buyers simply cannot afford to pay.
So it seems that a car shopper has one of two choices.
They either have to have no cash left after paying such a huge payment at the onset or suffer the consequences of a high-interest rate to avoid the initial down payment.
Neither solution is best for the buyer.
Many dealers will allow you to use your trade-in for at least part of the down payment.
This can deduct at least a portion of the down payment from the price but some dealerships get this money back in the long term payment.
Related Reading: Auto Loan Resources, Buying Tips and Other DIY Guides
What about leasing instead of a zero down payment car loan?
If you are dealing with a finance company or car dealership that offers a payment deal, make sure you check out the deal thoroughly before signing.
You may find a deal that offers no upfront payment, but the result is more expensive in the end. It is actually better to get into a lease deal than to get involved in this sort of debt spiral.
What do statistics say?
The statistics show that customers who purchase a vehicle through a zero down auto loan are more likely to default on the loan. This means they are considered a higher risk to auto dealerships.
That's why they end up charging you more over the long term. They want to have some assurance that they will get at least some of their money back if the person defaults on the loan.
What makes Valley Auto Loan Different?
At Valley Auto Loan, we understand how expensive down payments can be. We also understand that some buyers cannot afford this expensive down payment.
At the same time, we don't want buyers to run into trouble paying their debt when the payments increase or interest costs you more over the long term.
That's why we are different. We deal with many different lenders when looking for a deal for you and we do not stop until we find the best one.
Once we bring a deal to you for you to approve, you can rest assured that we have worked hard to negotiate the best deal for you based on your income, credit score, and other factors.
There will be no surprises when you deal with us.
Sell The Your Car Yourself
If you need cash fast to make a down payment or initial payment on your car loan, you could always sell your car yourself to get the cash.
This technique could get you the money you need to make a bigger down payment than you might normally afford, thereby decreasing your overall loan cost.
Work On Your Credit Rating
One of the best things you can do for yourself whether you are applying for a car loan or not is to raise your credit score.
Paying off old debts that are hanging over your head or making an extra payment once in a while on your credit cards can significantly help your credit score over time.
Look for Cash Rebates
Cash Rebates offer another way to save money in the final analysis while still taking advantage of a zero down payment car loan.
If you find a deal where the dealer is offering a $500 rebate, for example, you can use this as part of your initial down payment.
Remember that the most important thing when buying a car is getting the car you want and securing the terms that you can deal with that will fit your budget.
Whatever your credit rating and other factors are when you go in to finalize the initial contract is what you'll be bound to throughout the life of the loan unless you refinance.
Refinancing Your Car Loan
If you have a bad deal that you are in currently and need to look into refinancing, Valley Auto Loans can help with that, too.
Refinancing offers you a second chance to renegotiate your contract so that it is more reasonable or easier to pay back.
Some deals offer tax credits that may save you money on your taxes. Be sure to check this out too while you are shopping around.
Beware of companies that offer low or no payments in their brochures or flyers.
This may be a way to lure customers into a high-interest deal that they will later have to refinance or forfeit when the payments are too much to handle.
Consider All of The Factors
Remember that it's not enough to know the monthly payments. Sure, you have to know that you can afford the installments.
But, more importantly, what will you pay in the long term? It's always best to consider the deal on a long-term basis so that you get the most for your money.
Remember the rule: A zero down payment is only a good deal if the total cost of all payments represents the total car value to you.
What do you value?
If you value having a nicer car that is more expensive than what you have had in the past, it's fine to pay a bit more.
Just make sure you can afford the payments and that you are not being charged higher interest that will cost you more over the long run.
Try to improve your credit rating by making better choices, especially if you are planning to purchase a car soon.
Tips for Getting a Better Deal
We've compiled a few helpful tips for car buyers that may help you to get more for your money.
Check these out and then fill out an application on our site to see how we can help you personally.
- Look for the best long-term deal, not just the best monthly payment.
- Find a deal with the lowest interest rate that you can get for your credit rating.
- Work on your credit score. If you are planning to buy a car over the next 12 months, start now to clean up your credit by paying off unpaid debts to raise your score.
- Consider a zero down car loan if it is the only way you can afford a car. But consider making a substantial down payment to lower your long term costs.
- Compare contracts and deals until you find the one that best fits your needs and budget.
Ready to Take Action?
If you are ready to start the process of getting your next car, you're in good company. We help our customers learn what their options are and work with several companies so that we get you the best deal possible.
Being upfront about the good and bad is something we believe in and as a result, we offer $0 down auto loans but without the hidden costs and fees.
Valley Auto Loans is the most transparent car loan assistant you will ever with, and we make sure our customers understand exactly what they are getting.
No down payment car loans can be a blessing. But you need to make sure it's also a great deal otherwise.
We can help you discriminate between a good deal and a bad deal and get you in the car you want.
Whether it's no initial payment car loans you need or a traditional loan, we can help.
Getting a car with 0 down payment is great when it's a great deal.
Just fill out an application for zero down auto loans right on our main site, then browse through the selections we have.
We'll help you connect with the right deal and get you driving the car you want in no time.