880 Walkers Line, Burlington, ON, L7N 2G2
My Garage

How to Buy a Car with No Down Payment in Ontario

Generally when shopping for cars you’re aiming to get the biggest down payment possible, because the bigger the down payment the less interest you’ll accrue. However, in rare cases the opposite is true. Sometimes disaster strikes and you just need your hands on a car as soon as possible and there’s options for that too. This article will walk you through how to get a car with no down payment in Ontario.


Why Car Down Payments Exist

Down payments don’t just exist as a benefit to consumers, their primary function is security for the dealership. When you take a loan out for a car, the return of money for the dealership is theoretical until that loan is fully paid off. So a down payment of 10-20% is money that is fully secure.

Dealerships and lenders like feeling secure, so the risk of going for a zero down payment is that they’ll increase the interest rate to compensate.

2021 Ford Bronco Available at Northway Ford

How To Qualify For a Zero Down Payment Car Loan

Applying for a zero down payment loan is easy, you just ask. Getting qualified is the tricky part because you’re not making a down payment so lenders will consider this loan high risk. In order to qualify for a high risk loan you need to have a strong credit history. Your credit score should be good or great and you should have no blemishes on your history. Click here to learn more about rebuilding your credit score.

The lender will also want assurances that you’ll be able to meet your monthly repayments, especially since without the down payment they’re going to be higher than average. If you can prove that with your current income you’ll easily be able to pay the monthly amount you’ll have a much better chance of being approved for the loan. Be sure to check your credit report regularly.

Payment History

Make Sure You Can Afford It


Of course if you do that calculation and realize you can’t make those weekly payments then you’ve got big problems. A zero down payment loan will not only be more expensive, with a higher interest rate, but it will also last longer, since you haven’t taken a chunk out of the loan with a down payment.


A zero down payment loan can totally cripple you financially if you’re not careful, so make sure you only get one if you know for sure you can pay it off. If you can’t then you need to compromise on the car you’re shopping for. A decent used car might be a much better option than something new.


What About Bad Credit?


Zero down payment options are also available to people with poor credit, you’ll just have to find a lender who specializes in bad credit loans. It’s an option but if you have poor credit you’re going to be hit with an extortionate interest rate on a zero down payment loan, so it’s not something we’d recommend except in the most dire of circumstances.


We'd love to help you buy a car with no down payment in Ontario! We have an awesome selection of new and used cars here at Click to Drive in Brantford. Click here to get pre-approved online with us or click here if you have any questions or inquiries about buying a new or used car in Brantford with no money down!