Dec. 23, 2022

Can You Buy a Used Car with $500 Down?

The answer is: yes, it is possible. It will likely come with a limited selection of vehicles to choose from, and a higher interest rate than if a more substantial down payment was available.

What kind of used car can I get?

A used car valued at a maximum of $5000 is likely the limit for a used car with $500 down. MCMC prefers a down payment of at least 10% of the car’s value. If you can’t find any used cars that you like within that budget, is it still possible to get a more expensive used car with $500 down. However, it will be more difficult, and might require you to put down more money on a credit card or line of credit, and will likely increase your interest rate.

Vehicle Options

At MCMC, you can browse and find the perfect car with in-house financing, with many brands and models to choose from.

Browse used cars:

Buy Used Honda Vehicles with Bad Credit

Buy Used Toyota Vehicles Here and Pay Here

Buy Used Nissan Vehicles Even with Bad Credit

Buy Used Chevrolet Vehicles with Bad Credit

Buy Used Jeeps Even with Bad Credit

Is it better to not make a down payment at all?

No. It is much better to make as large of a down payment as possible, since it will decrease the amount you pay in interest over the term of the car loan. If you want to buy a used car with $500 down, but are expecting to get more money in the near future, it may even be possible to commit to a bigger down payment, with part of it on layaway.

Also, the better your credit, the more likely your chance of getting approved. However, it is still possible to get a car loan with bad credit.

Reasons Why A Small Down Payment Of $500 Is Better Than No Down Payment:

  • It will help get your loan approved, as lenders prefer you have money invested in the car from the start.
  • It also incentivizes you to take care of your car.
  • It can save you money by:
    • Possibly getting you a lower interest rate, and thus a lower monthly payment.
    • Decreasing the amount of your loan, which also lowers the amount of debt you have to pay interest on.
    • Offsetting depreciation. Cars decrease in value as time goes on. By putting money down, you’ll lower the difference between what you owe on the car and the value of the car, and be able to close the gap more quickly.

Does the $500 down payment have to be cash?

No. It is possible to put at least part of the $500 down payment on a credit card. However, this is not recommended, as you’ll also be paying interest on the down payment, often at a higher rate than the car loan.

START YOUR APPROVAL HERE

Server error! Please try again!

Tags

financing