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

Answered by Car Loans Expert Jim on March 5, 2021

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

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Jim

Car Loans Expert

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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