When you're buying a new vehicle, a down payment can be a huge benefit for you, and it may also make or break your chances of getting approved by a lender. But when you're low on cash, is there a way around this without losing the deal?
A down payment for a vehicle is important for many reasons. First of all, by having some of your own money invested in the car, you are building equity in the vehicle. And, in the cases of brand new vehicles, you are decreasing the effects of rapid depreciation that takes place in the first year of ownership. Of course, the extent of the decrease all depends on how much you are putting towards the car.
Secondly, you are showing the lender that you are serious about the loan, and this could be the key to getting auto loan approval. And finally, keep in mind that your monthly car payments will be lower if you are able to put money down on your purchase. For car buyers who are struggling with damaged credit, this is a key advantage.
Alternatives to Cash Down Payments
If you are low on available cash, there are some other options to keep in mind so you can still get approved for that car loan.
- Trade in.
Your current vehicle may still have some value left in it. In some cases, a trade in can cover all or most of a down payment requirement. It just depends on what the condition and the demand is for the car, truck or SUV in question.
Dealerships will often offer rebates on new car purchases, and sometimes these rebates are substantial enough to be used as down payments. Or, you can use your rebate to supplement the cash value of your trade-in.
What We Suggest
Take a moment to really think about whether or not there are areas you can cut in your budget to make room for a one time down payment. Even if you are only able to scrounge up $500, that plus the value from a trade in may be all you need to get ahead of the game.
At Auto Credit Express, we have helped millions across America get connected with car dealers who are ready to get them into a great vehicle. Complete the online application today. It's fast, easy, free and of no obligation to you. From there, we will arrange a time for you to meet with the dealer who is best qualified to work with your unique financial circumstances. Start today.