If you are looking at buying a car with bad credit and no money down then you are going to need to do some very specific things in order to pull this off. Usually banks and credit unions (or anyone for that matter) do not like to make loans without having any kind of capital to back it up, especially when it comes to car loans due to the fact that a car is not really an asset (it is an asset in the sense that it can be sold, but unless it is a very nice, old sportscar then the car is what is called a depreciating asset – it is one that looses its value over time. As such, this is a bigger risk to the bank or lending institution). However, there are a few things that you can do to still get an auto loan, not pay anything down, and not pay a ton in interest costs over the life of the loan.
First, you need to see if you can fix your credit quickly. For some people this is very possible, for others it is a long-term project, but either way it needs to be done so do it.
Second, you must have a co-signer. This co-signer also must have a good credit score, good credit history, preferably been living in the same place for over a year, and have a current or previous relationship with the bank. This is an absolute must if you don’t want to put money down and if you want a good credit rating, and this is also how most of these types of car loans are made.
Third, try to find a good deal on the car, and make sure the car you buy has a good loan value. If you overpay for you car then the bank will make you put some money down, and if you buy the wrong car (talk to the loan officer, he or she will explain this to you) then you also won’t get as good of a rate and will also probably have to put money down on the loan.
Remember, in learning how to buy a car with bad credit it really comes down to one thing – reducing the risk that you are to the lender. If you can do that, then you have a good chance of getting your loan.