Do I have to put money down to qualify for a car loan?

I'm wondering if a down payment is absolutely necessary. I think this money could be put to better use elsewhere, if possible.

Answer
Borrowers with excellent credit can qualify for a car loan without making a down payment. These loan options are also called “100% financing.”
For borrowers with a short credit history or poor credit score, it is very difficult to qualify for a loan with no down payment. These borrowers usually need to put down at least 10% of the price of the car to be considered for a loan.
Remember, there are other costs involved in buying a car, including title and registration fees, insurance, and taxes. A down payment reduces the amount you are borrowing, but it does not change these fees and taxes.
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Jim Donaher
Answered on Mar 12, 2021
Jim Donaher is a freelance writer and manager with over 35 years' experience in the insurance, banking, and investment management businesses. He provides expertise on a range of topics and is able to explain complex industry information in layman's terms. Jim is the author of two books, including Call Him, He's Home: A Guide to Prayer for Regular People and Then Larry Smiled, a novel about life, death, accountability, and salvation. Taormina, Sicily is his happy place!
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