Man walks across car dealership
Mint/Getty Images

Buying a car is a significant investment, with the average new car costing $34,968 in 2017. Many people rely on car loans to help them afford the cost of the vehicle they will use to travel to work or to get around town.

The average down payment for a used car is generally 10 percent of the purchase price; if you’re buying a new car, you can expect to pay slightly more, probably between 12 and 20 percent. However, not everyone has the cash on hand to afford a down payment.

If you’re wondering how to get a car loan without a down payment, read on.

Know your financial situation

Before a dealership will sell you a car without a down payment, they’ll want to know that you are in good financial health. They will likely determine this by looking at your credit history and credit report. A high credit score, above 680, means that you have a history of paying your bills on time, and may help convince the seller that a down payment isn’t necessary.

If you don’t already know your credit score, you can get one free copy of your credit report from each of the three major credit reporting agencies each year at annualcreditreport.com. Also, our myBankrate service has excellent tools for understanding your credit score. Review your credit report for any errors that may negatively impact your credit score.

Consider a co-signer to buy a car without a down payment

If your financial situation makes it unlikely that you will be able to qualify for a car loan without a down payment, you might consider enlisting a friend or family member with a high credit score to serve as a co-signer on the loan.

A co-signer is essentially guaranteeing that the loan will be paid—if not by you, then by them. This means your co-signer is responsible for any payments that you might miss. If you miss payments or default on your loan, your co-signer’s credit score will be hurt (as will your own). Co-signing a loan is an important responsibility, and you should make sure your co-signer fully understands what he or she is getting into before agreeing.

Comparison shop for better offers

Different lenders will offer you different terms on a car loan. It pays to get quotes from several different lenders so you can try to get the best offer. Some lenders may not agree to sell you a car without a down payment, while others may be open to the idea.

When weighing your options, make sure to account for all factors, including interest rate and loan term, in order to determine how much the loan will cost you in the long run. You may find better luck getting a loan without a down payment through your local credit union, or through an online lender.

Weigh the trade-offs

Can you get a car loan without a down payment? Yes—but if a lender agrees to such a loan, there will likely be trade-offs. You may have to pay a higher interest rate, which means the loan will cost you more in the long run. In some cases, it might be worth it to wait a bit to save up enough money for a down payment rather than opting for a costlier loan with no down payment.