How to Get Car Financing Without a Down Payment

It can be relatively easy to get financing on an automobile without having to lay out any cash as a down payment. The easiest ways to get car financing without a down payment include: using a manufacturer’s cash back deal, applying a trade-in instead of cash or presenting an excellent credit rating to the dealership’s finance office.

Use a Manufacturer’s Cash Back Deal for a Down Payment

    Shop for manufacturer’s cash back deals by watching for advertising on television, in the newspapers or online. Significant rebates or cash-back deals are often offered as alternatives to no-interest or low-interest financing offers.

    Read the small print on a rebate or cash back deal to make sure that you are comfortable with the terms and that your credit rating is sufficiently high to qualify you for the deal.

    Go to a car dealership that is participating in the cash back deal and negotiate the price of the car. When it is time to finance the car, explain that you want to apply the cash back offer to the price of the car in lieu of a down payment.

Use Your Trade-in Instead of a Cash Down Payment

    Negotiate the purchase and the price of a new car with a car dealership salesman, without discussing whether or not you intend to trade in your existing car. If asked about trade-in and financing issues, defer the question until you have agreed upon the best deal you can get for the price and delivery of your new car.

    Offer your trade-in in lieu of a cash down payment if your existing car has value equal to at least 5 to 10 percent of the new car price.

    Apply the additional value to the cost of the new car if your trade-in value exceeds 5 to 10 percent of the new car price.

Get Nothing-Down Car Financing with Excellent Credit

    Check your credit rating before you apply for nothing-down financing. Take any steps necessary to improve it, so that you can get the best possible car financing terms.

    Request nothing-down financing and a competitive interest rate to finance your car if your credit rating is over 680.

Tips & Warnings

  • Another convenient way to avoid a down payment can involve tapping an asset such as your home equity line or life insurance cash value.

  • Keep a close eye on your financing deal to make sure you are not charged an above-market interest rate. Although you will not be able to get both a cash rebate and a no-interest or low-interest loan, there is no reason why you should pay more than competitive, market-rate interest if your credit is good enough to qualify for the cash-back deal.

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