Typically, when you go into a car dealership with bad credit, you end up really confused as to what you can and can't buy. Dealers will tell you that based on your credit history, you've only got a few options. This usually includes an older car with higher miles or a low priced entry level newer model. It can get really confusing when they start talking about interest rates and it seems that the interest rate is different on different models. To add to the confusion, down payments seem to be a number that constantly changes. You may be told that you have to put down $1500.00 on one vehicle and only $1000.00 on another. There just seems that no clear answer is available.
Well, the fact is that car loans can be really complicated when it comes to car dealers getting you financed. Dealerships have to figure how much money one of their loan companies will lend for a particular vehicle based on loan value. Then, there's their main interest, which is making a profit. If a lender won't lend enough money on the car for the dealership to make a good profit, they'll ask you for a down payment to make up for the difference. It's not that you actually have to have money down to buy a car, it's that the dealer needs it to make money.
You can avoid dealer financing altogether and get a car loan on your own with no money down. You may think that you can't, but you certainly can. All a dealership is, is a middleman for your car loan. When you get them out of the way, there are more lenders and opportunities available for you to get special finance deals.
