If you want to buy a vehicle, but you don't want to use any of your own cash for the down payment, you are probably looking for no money down auto financing. The terms of a no money down auto financing option, however, may not be on the favorable side. In addition, as G. Chambers Williams III writes in The Tennessean: “The U.S. mortgage crisis and a resulting credit crunch have put a crimp in auto financing, too, as consumers with weaker credit find it harder to get loans, lenders and auto dealers say. But even car buyers with excellent credit may see their choices of lenders dwindle as independent banks and finance companies scale back on the car loans they’re willing to make." So, consider the following alternatives to no money down auto financing.
You may be able to use a trade-in as a type of down payment, in order to avoid no money down auto financing. Auto Credit Express’ Consumer Blog offers the following example as encouragement to use a trade-in as “money down,” instead of going with no money down auto financing, and thereby expanding your options and getting a better deal. The writer explains that if a consumer has a car to trade in, for which the dealership offers only $100, a deal might be created where the dealership raises the price of the car you want to buy. In turn, the dealership raises the amount they will pay for the trade-in, “creating” a bigger down payment. Consequently, by avoiding no money down auto financing, you may be eligible for a better interest rate on your auto loan. Another option to consider before signing onto a no money down auto financing option is the rebate. Some lenders will allow new car rebates to take the place of the down payment requirement, again aiding you in acquiring a lower interest rate.
However, if neither of these suggestions works for you, there are still plenty of no money down auto financing options. In the end, you will pay for the fact that you could put nothing down, but that may be the only road to getting what you want or need at this moment. Do remember, research the lender you are considering for your no money down auto financing. Make sure they are reputable as they will have your personal information and will now form a part of your financial well-being.