1. Credit. If your have good credit all the bank needs is a your signature.

2. The approving lenders minimum required down payment.

• Many lenders have a minimum down payment requirement such as 10% of the loan amount or a fixed amount such as $1,000.

3. The specific amount that your approved for.

• If you select a vehicle that is more expensive that the amount that your approved for you will have to use a down payment to make up the difference.

4. The value of the car relative to the sales price.

• Car financing companies base their loan on the value of the car, commonly referred to as "Loan To Value" or LTV. Often your approval will have a stated maximum LTV, such as "Maximum Loan Not to Exceed 120% LTV".
• The financing company will base the cars value on a regional book value. If your trying to buy a car with a sales price that is greater that the regional book value the lender will require a down payment.

Typically the following types of cars have a high loan value relative to the sales price (Less Down Payment).

• Cars that are out of season.
• Convertibles in fall and winter.
• 4 X 4's in spring.
• Current model year used cars.
• Previous model year domestic cars.
• Most SUV's.
• Most Mini Vans.
• New vehicles with large rebates or dealer incentives.

Typically the following types of cars have a low loan value relative to the sales price (Greater Down Payment).

• Cars that are in season.
• Convertibles in spring..
• 4 X 4's in fall and winter.
• New cars that are hot sellers without rebates or incentives.
• Late model Toyota and Honda's.

What qualifies as down payment?

• Cash.
• Trade-In – All lenders allow trades to be used as down payment, however, if you owe more on your trade than it's worth it will create a negative down payment "negative equity".
• Factory to consumer rebates - most lenders allow this to meet their minimum requirement, some do not.
• Factory to dealer rebate - most lenders allow this to meet their minimum requirement, some do not
• Dealer to customer rebates – Lenders never count this as a valid down payment. In fact, these rebates if used without the permission of the lender are illegal and are in violation of the Federal Truth in Lending Act.
• Side notes (hold checks) – Generally this is not an acceptable practice. Some lenders, however, do allow it if the side note is paid in full prior to the first payment becoming due and is disclosed on the financing contract.

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