$0 Down Payment Car Financing: The Ultimate Guide

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A down payment is a large chunk of money that you put towards a car before taking out a loan, generally around 20% is considered the standard which for a new car could amount to $1000-$2000 dollars.

There’s a great benefit to doing a down payment but if you’re going to struggle with that, there is an alternative, you could opt for a $0 down payment car loan instead. 

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Benefits of $0 Down Payment Car Financing

Probably the biggest benefit of getting a car with a zero down payment is that you’ll be able to drive off the lot without having any cash in hand, if you need a car but don’t have a large amount of cash on hand then this can be a huge benefit to you.

Zero down payments (as long as you can actually afford to pay the loan month to month) can also have the side benefit of improving your credit score since you’ll be paying off the loan over a longer period of time. 

Benefits of Having a Down Payment

The cost of a zero down payment loan comes back later however as eventually thanks to loan interest you’ll end up paying more for the car than you would have with a down payment. Because the loan is based on the amount after the down payment there’s more interest applied to the money.


That’s why it’s generally recommended that you put down as large a down payment as you can afford because while it might be pricey up front, in the long run you’ll end up paying less. On top of that a zero down payment loan often also comes with a higher interest rate than a down payment loan as well. However, if you’re in a situation where a down payment isn’t possible a zero down payment loan is still a potentially good option for you. 

How To Get a $0 Down Payment Car Loan

There isn’t a special procedure for getting a zero down payment loan, however with no down payment the loan may be considered higher risk, which means that the requirements for getting the loan will be higher. In order to be considered for a zero down payment loan you need to make sure you have a strong credit score and credit history. 


You’ll also need to be able to prove that your income can support the higher-than-average monthly rates. Once you and the lender are comfortable with all the facts, you can drive off the lot with your new zero-down payment car loan. 

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