How to Buy a Car with No Money Down

Buying a car with a down payment often results in a lower interest rate and monthly payment. Unfortunately, some buyers do not have the extra cash and choose to buy a car with no money down. Several auto lenders approve no-money down vehicle loans. However, not everyone qualifies for this type of loan. Before stepping foot inside a car dealership, familiarize yourself with a lender's no-money down loan requirements.

Instructions

1

Establish a credit history. Obtain a credit account before applying for an auto loan. Apply for a secured credit card or obtain a student credit account. Because creditors report to the bureaus after the first month, you'll establish credit immediately. However, it can take between six and 12 months to develop a good credit score.

2

Check your credit score. To get a no-money down car loan, lenders generally require a good credit score (680 or higher). Check your credit report before completing an application. If necessary, improve your score by 20 or more points. Reduce your credit card debt, pay creditors on time and limit credit inquiries.

3

Select a co-signer. If you don't have a credit history, or if you have poor credit, find a co-signer. A co-signer can improve your chances of approval. And since he becomes equally responsible for the debt, the lender may grant you a no money down car loan. Choose someone with good credit, and make sure he understands the co-signer agreement.

4

Assume a car loan. If you know someone who's looking to get rid of her car, offer to assume her loan and take over her payments. Contact the auto lender to see if it allows car assumptions. If so, you'll have to qualify for the loan, in which lenders will request your credit and income information. However, car assumptions do not require a down payment.