A no-money-down car loan is a car loan that does not require a down payment. These loans may be easy to obtain for people with good to excellent credit, but people with bad credit may have a tough time finding these offers.
While getting a car with no down payment may seem enticing, there are drawbacks. First, the buyer pays more in interest with a higher balance. Second, it takes longer to pay the car off, and the owner may end up "upside down," which means that he owes more than the car is worth. The longer it takes to pay off a car, the higher the risk of being upside down.