Yes, you can get approved for an auto loan with bad credit. We work with lenders that are willing to focus on other factors than your credit when making an approval decision.  Here is what will you need to qualify for a bad credit auto loan.  Most special finance lenders will want to see your most recent paycheck stubs to verify your income, they want to see that you will be able to support a car payment. You will also need a valid driver’s license and proof of residence (a utility bill or phone bill in your name showing your address).  You may also be wondering about how much you’ll need for a down payment, or if you will even be required to provide one. The truth is, whether it is required or not, having a down payment will help in several ways.

How Much Do You Need for a Down Payment?

Most finance companies that we work with require a specific amount of a down payment to get qualified for a loan.  Some will ask you to put down 10% of the vehicle’s total price or $1,000, whichever is less. Others may request more. Most of the time, a down payment amount will be determined by the customer’s situation.

You need to realize, a down payment isn’t just something that the dealership requests. Providing cash up front on your car purchase may make for an easier buying experience. It can also save you money overall as you are financing less so that is less money that interest is charged on.

A down payment can help you get approved

Lenders consider risk when making approval decisions. This is why it can be difficult for someone with damaged credit to get a loan from a bank or credit union. Having negative marks on your credit report can make you seem like a loan risk.  However, if you provide a large enough down payment, you will reduce the amount of money you’ll need to loan on a particular vehicle.  Reducing the loan amount also reduces the risk to the lender, your approval chances will be better.   If you are able to put a larger amount down on your car purchase, it shows the lender that you are serious about the purchase.

A down payment can help you pay less interest

Purchasing a car with bad credit often means accepting a higher interest rate. But if you provide enough of a down payment to shrink the amount of your loan, you won’t have to pay as much in interest fees over time.  You can also use your down payment to reduce your monthly payments. If your car payments are more affordable, it is less likely that your ability to pay other bills will be compromised.

A down payment can decrease your negative equity risk

Vehicles, especially new cars, lose value over time. So, if you put little or no money down on your car, you could find yourself in a position where you owe more money on your loan than your vehicle is worth.  This is called having “negative equity” or “being underwater” and can make it very difficult to trade your car in or sell if you need to.  However, having a large down payment will build equity in the vehicle. And the more equity you have, the less likely you are to have negative equity.

Get a Car Today Regardless of Credit

If you’re buying a car with bad credit, there are very good reasons to save up as much as you can for your down payment. And remember, if you have equity in a trade-in vehicle, its cash value can go towards the amount that you put down on your next car purchase.  Of course, if you need a vehicle right now and don’t have time to wait, Overdrive Automotive Center is always able to work with you.  No matter what your credit situation looks like, at Overdrive Automotive Center, we will do everything we can to get you approved and into the vehicle, you want at the best prices anywhere.   Fill out our fast, simple and secure online application to get started today.


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