You can put $500 down on a car at several types of dealerships, with "buy here, pay here" (BHPH) lots being the most common option. Mainstream franchise dealers (like Ford, Toyota, etc.) typically require a higher down payment, often $1,000 or more, unless you qualify for a special first-time buyer program. Your ability to secure a car with only $500 down heavily depends on your credit score, the car's price, and the lender's requirements.
For those with challenged or no credit, BHPH dealerships specialize in in-house financing and are more likely to accept low down payments. However, this convenience comes with trade-offs: higher interest rates and older, higher-mileage vehicles. If you have fair credit, researching special programs like GM Financial's SmartCredit or Ford Credit's First-Time Buyer programs is crucial, as they sometimes offer more flexible terms.
Your best strategy is to be prepared. A larger down payment always improves your chances and terms. Here’s a quick comparison of where to look:
| Dealership Type | Typical Min. Down Payment | Best For Credit Profile | Key Consideration |
|---|
| Buy Here, Pay Here (BHPH) | $500 - $1,000 | Poor/No Credit | Highest interest rates; focus on payment history, not credit score. |
| Major Franchise Dealer | $1,000 - $3,000+ | Fair to Good | Special first-time buyer programs may accept lower amounts. |
| Used Car Superstore (e.g., CarMax) | $1,000+ (or 10%) | Fair to Excellent | More standardized pricing; down payment often a percentage of price. |
| Online Retailer (e.g., Carvana) | Varies; often $0+ | Good to Excellent | Convenient but may have stricter credit requirements for low down payments. |
Before you visit any dealer, check your credit score for free through your bank or a service like Credit Karma. Get a pre-qualification from your own bank or a credit union, as they often have better rates. This gives you leverage. Always read the entire contract, focusing on the Annual Percentage Rate (APR) and the total cost of the loan, not just the monthly payment.
