‘Bunch Of 500 Fico Wanting A 500 Down’: Man Tries To Do Zero-Down Financing At Dealership. Then The Salesman Pulls An Uno Reverse

A car seller from Miami, Florida, is warning customers looking for zero down financing on vehicles to not hold their breath. The salesman, who posted his PSA on Green Light Auto Inc.’s social media channel (@green.light.auto), explained why this is the case.

“Today I had a client who walked into my dealership and wanted to do the no-money-down option,” he said. “I told him, 'That doesn’t exist here. Our down payments typically begin at 15,000' because I don’t like to waste people’s time nor mine. I know that zero money down at my dealership doesn’t really exist,” he says to his viewers.

The car seller continued: “So what happened was, we submitted the deal. Deal came back; it was like two grand down, which was still a good approval. And they’re like, 'No, I’m gonna go to another dealership. They told me I can do with no money down, or even $500 bucks, and I can drive off with a vehicle.'”

According to the dealership employee, these types of sales initiatives just aren’t available for car buyers in certain credit score brackets.

Car Salesman Blasts Zero-Down Financing As A Lie

Furthermore, he said that prospective buyers are effectively lying to themselves about not having to put anything down to finance a new vehicle.

“Ladies and gentlemen, I need you guys to stop being so naive or ignorant," he said. "All right, if you’re mid-tier or below in credit score, you will have to put a down payment, and it ain’t gonna be zero or 500 bucks. It’s gonna be more than that. So, stop falling for this. And then you guys have the audacity to say, 'Oh, the dealer deceived me.' You deceived yourselves for continuing to believe this. At this point, you keep crashing into the same wall, and now … you’re telling me you’re just ignorant, maybe even playing dumb."

Following this, he goes on to state that financing a vehicle without having to put any money down is like spotting a unicorn in the wild.

"If you’re gonna get into a vehicle and you have mid-tier or below, be ready to come in with about 1,500 bucks, which is what I advise all my clients, especially if I wanna put you in a good equity position so that you’re not upside down for a long period of time," he says. "You wanna come in with more down payment. So zero down is not even recommended, especially if you’re in that position."

Yes, Zero-Down Car Payments Do Exist, But There’s A Catch

According to Lending Tree, car buyers can indeed finance a vehicle without plopping any money down on their loan upfront. According to the outlet, these loans “often come with higher interest rates and longer terms than other types of loans.”

Additionally, the outlet penned that folks with “poor credit” can secure these loans, but at a cost. As financers are “more likely to face a higher annual percentage rate (APR) on [their] … loan and fewer options, especially without a down payment.”

The same article does corroborate what the Miami-based car dealership said about going “upside down” on a loan, however.

“If you finance the full purchase price of your vehicle by putting no cash down, you’re at a greater risk of owing more on your car than it is worth,” the write-up states. Chase Bank also corroborates these same points in its own blog post about zero-down car-buying deals.

So, what’s the best course of action for car buyers? Lending Tree explains that folks with bad credit are a risky investment for lenders. Since the buyer’s financial profile indicates they may have trouble paying the loan back, higher interest rates are appended to their loans.

“With a loan-to-value (LTV) ratio that high, you have little-to-no equity in the vehicle, increasing the lender’s potential loss if you default on the loan,” Lending Tree states.

The website recommends that prior to applying for a loan, buyers should work to improve their credit scores to secure a better APR. Providing proof of income and financial stability, along with ameliorating one’s debt-to-income ratio, can also go a long way in locking in a better financing rate, too.

Walk Into The Dealership Pre-Approved

Not waiting for a car’s financing department to approve you for a loan is also a good way for buyers to be appraised of their loan options. Bankrate writes that shoppers almost always “find better deals on interest rates” when they directly apply for an auto loan themselves.

This way, when you approach a car seller with documentation of your pre-approved loan amount, you won’t have to go through the rigamarole of monthly payment options and interest rates.

“You’ll generally be better off with a loan from a bank, credit union or online lender,” the site shared. But there’s also an added benefit to this tactic: “Not only will this give you negotiation leverage, but you’ll likely find a better deal on interest,” Bankrate writes.

It’s important to note that interest on a car loan is compounded, meaning that the more money you owe on a car, the more you pay in interest. This is why, as with any loan, making additional payments on the principal amount can reduce what you fork over in the long run. So, if you’d prefer to put zero down on a car loan when you’re walking out of a dealership, you could always overpay down the line.

Motor1 has reached out to Green Light Auto Sales via email for further comment. We will update this story if they respond.