Cars can be expensive, sometimes running into hundreds of thousands of naira. Those who don’t have such a huge amount readily available can buy a car on an installment plan. But even then, sellers require customers to make a large upfront down payment, which often discourages them from going through with the deal. Fortunately, there are a number of ways for individuals to avoid the down payment and bring home the car of their dreams.

1. Apply for an auto loan
Many banks and financial institutions in the country offer auto loans. Individuals can apply for this loan and use the money to pay for the car in full. Depending on the amount received, they can purchase a car of any brand and at any price point. That said, they will have to make monthly installments to repay the auto loan over a fixed period. If someone does not make repayments on time, the bank may take possession of or seize the vehicle. They may auction it to recoup some loan money.

The interest rate is another drawback of such “buy a car, pay monthly” financing options. When repaying in monthly installments, individuals must account for the interest charged. The interest is usually higher, but it can vary depending on the lender, location, and other factors.

2. Optimize credit score
When applying for an auto loan or another kind of loan, the bank will likely check one’s credit score. A credit score reflects how diligent a person has been in repaying loans in the past . Those who have defaulted and missed deadlines will have poor credit scores and may not get approved for a loan. Even if they do, the amount approved may be significantly lower.

Improving one’s credit score takes time and effort. Individuals with poor credit scores must pay their loans and credit card bills on time for a given period of time. By doing so consistently, one can improve their credit history and access loans and zero-down-payment financing options on cars more easily.

3. Get a co-signer
Those with poor credit scores who want to buy a car can enlist a co-signer. It could be a friend, family member, colleague, or anyone with a strong credit history. A co-signer assures the bank that they will be responsible for repaying the loan if the primary borrower defaults. With such an assurance, the bank becomes more confident in issuing the loan. Once received, the borrower can use the money to buy a car without a downpayment. They then need to repay the loan to the bank on time.

This arrangement, though, comes with many risks for the co-signer. The co-signer must pay out of pocket if the primary borrower misses installments. Also, the credit score of the co-signer gets negatively affected in cases of default. For this reason, finding co-signers can be challenging for borrowers.

4. Look for zero-down financing options during festive occasions
Banks and auto financiers usually offer their best deals, including zero-down financing, during the New Yam Festival, the Calabar Carnival, the Eyo Festival, and the Osun-Osgobo Festival. So, those looking to get brand new cars can wait for such special occasions.

Banks and lending institutions are under increasing pressure to attract more customers and meet targets during festive occasions, which is why they roll out deals at this time. Besides offering zero-down-payment financing, they may have more lenient credit score requirements. That said, because of the rarity of such offers, most people across the country rush to buy cars, houses, and bikes and make other big investments during festive occasions. So, one should create a strategy to shop and not miss out on the deals.

5. Consider dealership and manufacturer financing
Car buyers will likely find great financing deals and options from carmakers and dealers, besides banks and lending institutions. Dealerships usually have sales targets to meet every month, so they try to simplify car purchases as much as possible for buyers closer to the month’s end. They also partner with banks and auto financiers to offer zero-down payments and other deals.

Unsurprisingly, these offers come with strict credit score requirements attached. So, if an individual’s credit history is positive, they stand a high chance of getting zero-deposit financing deals from dealerships and car manufacturers. Even then, individuals should compare the offers at multiple dealerships and choose the best one.

6. Opt for secured loans
Those who do not have a good credit score and can’t find a co-signer can consider applying for a secured loan. When doing so, one must pledge collateral, such as bank deposits or an expensive asset. The lender’s risk of a loss is reduced since they can sell the collateral and recover the money if the borrower defaults. This gives them the confidence to approve an individual’s loan, even if they have a poor credit score.

The positive aspect for borrowers is that the interest rates of secured loans are very reasonable. But they should not be blinded by these rates and rush to sign over the dotted line. Instead, they should focus on the terms and conditions of the loan and see under what conditions they risk losing the collateral.