A large enough downpayment will offset just about anything. 30% as an example pays for the depreciation of the vehicle by years, and if you flake during that time, the bank just turns around and sells your car for a profit. 20% is probably reasonable for what you're trying to accomplish.
I put 12k down on a 32k OTD price on a used vehicle with an Auto EX pull of 551 and got financed... being nearly a thin file, with no auto loan history, no installment loan / mortgage, one revolving credit line, and a massively nasty albatross that would still stink up the joint even if I had bulletproof credit otherwise.
I hit pretty much every possible extra special bonus round in terms of stupid credit with the exception of no BK and still got financing: I highly doubt you're looking at the same issues I had, especially as it's going to be on a lower note from your descriiption and you've carried a car loan or two to term sucessfully... and new cars are easier to finance regardless. The APR is likely to be ugly, but that's where we get stuck for being high risk borrowers... and the only way to get out of that is to bite the pillow, make the payments, and improve the score as a result (and refi when possible!).
@Booner72 wrote:I think OP's question was whether a big down will help the interest rate. I believe that it wont and I think you might have to get a cosigner or bite the bullet and pay high interest. The good thing is, you aren't looking for that big of a loan so you can pay that thing of ASAP if you do choose to go w/ financing.
Ah, I may have misread - it should help the rate absolutely, for several reasons:
- It reduces the amount you need financed: this reduces the lender's exposure.
- You're putting skin in the game too, if you flake, the lender takes the car (the loan is secured against your title after all) and that downpayment is just wasted cash. Take any risk analysis you want, it's statistically certain that the people are less willing to welsh on their own money than someone else's.
- It pushes the depreciation of the vehicle out by some period of time from the bank's perspective - the depreciation comes out of the downpayment first effectively. Again if you flake, the lender repossess the car, and they go sell it. They lose either a) less money, b) no money, or c) GAIN money (profit!) based on how much your downpayment was... basically whatever is left of the note vs. the actual value of the car at the time you stop making payments, or at least what they can get for it at auction.
@For all these reaons the bank is going to be more willing to fund your loan than not the more you put down: that *should* directly lower your rate as it's a less risky bet for the bank to take. It may not for every lender to the same extent (and some are @#$(#$*@ to begin with), which is why it pays to shop around for an auto loan.