down payment requirement for low interest rates?

[Anonymous]

Hello all, Does anyone know if there is a down payment requirement for the low interest rate loans offered through many of the major manufacturers? We are primarily looking at GMAC's 0% loans or Honda's 2.9%, both for 60 months. We will have a couple thousand to put down, but on a $30k car, that will just cover TTL, so no real Down payment. Just wondering if it is even possible to get these low interest rates without a down payment. I know we also have to qualify credit wise, but just wondering if it is even possible if we qualify. I was originally thinking about going with our credit union and taking the $2k rebate on a Chevy or GMC, but the savings in interest is more than that, so if we can get it, it seems like the better deal. If we go with honda, they aren't offering rebates right now, so 2.9% is obviously better than our credit union's current rates, which are in the 4% range. Of course, this could all change in a month when we are actually ready to buy, but I am just trying to get an idea of our options. Thanks!

[Anonymous]

First, have you done the math?  Sometimes a rebate, immediately put into a CD or some other "high yield" account will net you more dollars than the lower interest rate.  Especially if its only 1-2% difference as you state here.

Second, I believe that couple grand you have to pay TTL qualifies as a DP.  I think TTL is rolled into the loan, and then any dollar amount you give them up front is the DP.

[Anonymous]

I had not thought about putting the $2k in a high yeild account as we had planned to put the $2k toward the purchase, making the loan that much less. I did the math in terms of comparing the interest paid at my credit union's current rates over 60 months with $2k less borrowed vs. 0% over 60 months with $2k more borrowed, which is the better deal (saves about $3700 in interest, which means we are saving $1700 more than we would going with the $2k rebate and credit union fincancing). I guess I will have to look at that option also.

If the $ we pay towards TTL  is considered a down payment, is that enough of a down payment to qualify for the low interest rates? I guess I am still asking what, if any, down payment requirement there is with these programs (i.e. do you have to put a certain % down?)

[Anonymous]

Most factory lenders will have bands or tiers and the auto score will have to be above a certain number to qualify for special financing. Just call the finance manager of a dealer you would buy at and ask him the questions. They want to sell cars and will help you understand the qualifications needed in order to get low rate financing. Many times the down payment will be also set by score and debt to income factors. You could have a high score and high debt and not qualify for special financing. Try and find out what will be pulled by the dealer you will work with and then find out what your regular FICO scores are and let him see that information before he pulls your reports that way he will have an idea where you stand or close to it.

[Anonymous]

Non profitable (or subsidized) interest rates are called subvented.

They are done as a purchase incentive usually through the manufacturer finance arm and/or a preferred lender.

Since they are not tytpical straight forward loans, the criteria to qualify for a subvented rate varies from situation to situation, and even time of month, day of the week. I have seen people get 0% one day that would have not qualified the previous because the home office altered lending criteria for that one day to boost sales.

in general a downpayment is NOT required as long as your loan to value is within the proscribed margin. Again that is up to the individual transaction, a finance manager can help you out. A downpayment can qualify you though if your credit is flawed.