How to Buy a Car With Little or No Money

When you buy a car, you are expected to put money down on the vehicle in the form of a down payment. Fortunately, however, if you don't have the cash for a down payment or to pay for a car, there are certain steps you can take to obtain 100 percent financing for the purchase. Generally, this involves qualifying for a loan and making payments on a monthly basis. When you finance a loan or buy a car with no money down, you also want to make sure you protect yourself from financial liability.

Instructions

1

Determine how much you can pay in monthly payments. If you can't afford to buy a car for cash, you will have to secure an auto loan that has monthly payments. Therefore, it is essential for you to know how much you can afford to pay each month.

2

Look for a car loan online or at a bank or credit union. This can often be less expensive than getting a loan from a dealer. Plus, if you get financing before you go to the car lot, you will know how much you can afford to spend on a car once you get there.

3

Ask about dealer financing. These types of loans are issued by the dealer, who usually works with a lender or credit union. Dealer financing may be easier to qualify for than a private car loan, but it also has a higher interest rate. Still, if you have no other way to buy a car, dealer financing on the vehicle may provide the answer.

4

Buy a car that you can qualify for financing on. If you are not eligible for a large car loan or can't afford large monthly payments, you likely will have to settle for a less expensive car. Make sure that the car is safe and reliable---otherwise you could just be buying a problem. Also read the terms of the loan carefully so there are no surprises (i.e., that the interest rate on your car loan is exorbitantly high).

5

Consider GAP insurance. This is an insurance policy you can buy for a few dollars per month and is a good idea for those who buy a car with no money down. The insurance will pay the difference between what your car insurance company gives you for the car and the amount you owe on it in the event that the car is stolen or declared a total loss after a car accident. If you don't have Gap insurance and you put nothing down on the car, you could easily end up owing more than the car is worth and thus having to pay back the loan out of your own pocket even if something happens to the car.