Will a down payment increase my chances at a car loan?

I want to buy a pre-owned car in January and use my tax return as a down payment but I have bad credit. Does a down payment increase the chance that they'll give me a loan? I am planning on a $2000 down payment and buying a car that's not over $10k. I make $2800 a month, so I can afford it.

Will a down payment increase my chances at a car loan?
NO... if your labeled having bad credit that means high rates no matter size down payment.





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Reply:Obviously a down payment will help but you can still expect large monthly payments due to your credit score.Also if you didn't know you more likely then not will have to have full coverage on your vehicle until it's paid off.There is a chance though that after about a year of steady payments you can re-finance your loan and bring your paYMENTS DOWN UP TO 35%
Reply:No it will not help. I am looking at your question as being, your credit is so bad you can not get a loan, if you have $2000 will the bank that said no when you had zero down, say yes, when you have $2000 down? No, they will still say no.





If the bank says yes to a loan, the down payment will help out with the fees and the tax and get you to a good loan to value rate, meaning low book on your car is say, $9000, you have $2000 down so will finance close to low book, that will make a bank happy....But it does not make a bank say yes. i have seen people come in with $20000 down on a $25000 car and the bank said yes because the down payment was so large. You are working with $2000, that's good, but is is not going to change the banks mind. Good Luck
Reply:You are going to get a car in January...in the meantime why don't you start making payments? Put the monthly payment you plan to make into a savings account and make the interest yourself. This will give you an accurate idea of what you can afford, and keep in mind that you will have full-coverage insurance expenses on top of that (try saving that money too).





You can figure out how much you are comfortable with paying each month before you commit to buying...and you may decide that with your savings and tax refund you would rather buy a reliable car for cash, carry liability insurance and to save money for your next car...become a cash customer!





Good luck
Reply:Yes, Because to the bank who will lends you money for the loan, It will make you less of a Risk, the reason being You have your own hard earned cash put into it, so if they repossessed the vehicle do to default in missing your payments. you would loose all that cash and they would have a closer chance of breaking even on the loan cause the initial loan was lower than they initial selling price because you put a down deposit, on the car.





So if you have bad credit, most descent banks will give you a loan if you have a 25%-30% down deposit, for good credit go with a 5%-10% deposit and you will have a better chance at getting good financing options
Reply:Getting a new car loan is not easy though it can be the easiest way to attain your dream car. There are many players in the car finance industry and for the consumer choosing the best%26lt;!--type of loan is a difficult task. Many factors have to be considered before taking up a car loan. Whether you want to take up a loan or not, will depend upon the car you want to buy.





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Since the rates of interest on different cars vary so the type of loan that you need will depend on the car you want.The total cost of the new car loan does not include only the interest payable but also--%26gt;extra charges such as processing, transaction fees, documentation fees or any other fees. So one has to confirm with the financer as to the other charges that accompanies an auto loan.
Reply:A down payment of that size will definitely increase your chances for the loan. As a rule of thumb things are much easier to get financed( maybe at a higher interest rate) if you have at least 20% down. Since your down payment equals out at right around 20% I'd say your odds are pretty good. Don't sell yourself short, by from a reputable dealer, not just whoever will finance you. If need be spend a few months saving a little more, rather than having to put more money into a car you just bought. good luck!
Reply:yes that should definitely help you out, it will definitely make them feel easier about financing you if your giving them a good chunk of it (in your case up to 25% down payment) and just paying the rest off. you'll probably get a better rate and as long as you don't miss any payments, you'll improve your credit rating a little too!
Reply:YES!


I like to get a one year old car, like a showroom demo.


They are at least half - off of the price of a brand new car of


the same kind! And it still has at least two years left on the


factory warranty!!!!


If you can, wait until the dealers get their new model year cars in, because they are more willing to bargain with you!
Reply:Yep. Dealers look at LTV. Loan to Value. You will most likely qualify for a loan, assuming your income remains the same.A bigger down payment is definitely a good bargaining chip.
Reply:It will certainly help, but does not guarantee approval. It will all depend on how bad your credit is. If you had repo's or bankruptcies in your past, it may still not be enough to push you over the top.
Reply:Certainly. It may mean you get a better loan rate too.