Down payment

Aleah Williams

Asked by Apr 21, 2016 at 09:08 PM

Question type: Shopping & Pricing

About how much would a person need to
make to qualify for a car under 5,000

2 Answers

Tom Demyan

Most banks won't approve you for an auto loan for that low amount. You would need to take out a personal loan, so the more down payment you can afford the lower you monthly payment or buy a car cash. Here is a auto loan calculator to help......


Depending on your situation it is actually possible to get a loan for that small of an amount, but there are factors regarding both you and the car that are considered in addition to just your income : 1. Debt to income. To get financed, banks calculate how much money you've got coming in (income) against how much you've got going out (debt such as rent or a mortgage, credit card balances, etc. ) 2. On a $5k car, there is not a lot of room for the bank to make money, so regardless of your credit situation your interest rate will automatically be higher and your term will be shorter. ( whereas a loan for $10k+ can qualify for 60 months, banks that will finance $5k will give you a 36 or 48 month term tops. ) 3. Also, banks normally stipulate that you can not have a car a certain age old or with a certain amount of miles on it. That means your options for vehicles around $5k is going to be EXTREMELY LIMITED. 4. I would also be ready to make a down payment for at least 25-30% of the vehicle. We work with a number of credit re-establishment and first time buyer banks and although it is definitely possible to get approved for a small amount, your better off all the way around to try and financed for more and get as much vehicle as possible. One of the first rules in buying automobiles - You get what you pay for !

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