Getting Behind The Wheel with Zero Money Down
Americans are increasingly searching for "zero down" car deals. These promotions allow them to finance a car with no down payment required. With the financial climate taking its toll on everybody, having the several thousand dollars available in cash for a down payment is no easy task. But before you move forward with a zero down car loan, it's important to know not only the advantages, but the disadvantages as well.
Zero Down and Drive
The Pluses and Minuses of Zero Down Financing
Are you looking to finance a car but do not have money to down? Don't worry, as financing a car with no down payment is possible now a days. In fact, many car dealerships are offering this option to their customers. Simply search to see what dealerships offer this option or even look into separate lenders to give you a car loan with no down payment.Financing a car with no down payment gives you the car you need without having to put a lump sum down. If you have good credit this option is more likely to be on your list of ways to finance your car. The better your credit is, the more likely you will be able to finance the car with no down payment.
With all financing options there are also disadvantages of financing a car with no down payment. If you choose this option your monthly payments are more likely to be higher. Also, your interest rate may also be higher as they are trusting you with a bigger loan. If you put a down payment on your car before you purchase it you will most likely get a lower interest rate and have to pay less for the vehicle.
Depending on if you want to save money immediately, or save money over time will determine if financing a car with no down payment is right for you or not. Weigh your options and play around with the figures to see which is more worth it.
Helpful Resources
For Those Considering a Zero Down Auto Loan
Check out these helpful links for determining whether a zero down auto loan is right for you.
- 0 Down Car Loans
- This website offers a wealth of information, and actually allows you to apply for a zero down auto loan online.
- Vehicle Ownership Costs
- Make sure you know just how much that new car will cost. The last thing you want to do with a zero down car deal is strain your budgets with monthly payments that are too high.
- Buy Here Pay Here Car Loans
- Buy Here Pay Here car lots sometimes offer zero down car deals. Check out this Lens for more information.
Zero Down Auto Loans
The Benefits
1. Instant Gratification: Get into a new car right away, without a down payment.
2. Short-Term Disposable Income: Your "buffer" of emergency cash/funds will not be drained -- a nice security blanket in this tough job market.
2. Short-Term Disposable Income: Your "buffer" of emergency cash/funds will not be drained -- a nice security blanket in this tough job market.
Zero Down Car Loans
The Drawbacks
1. High APR Rates: your auto finance rates will typically be higher.
2. Credit Approval Issues: If your credit is less-than-perfect, you may have more trouble getting approved for financing without a down payment, as many lender require them.
3. Long-Term Risk of Negative Equity: although you will have more cash on hand in the short term because it didn't have to be put toward a down payment, you will face an increased risk of owing more on your vehicle than it's worth. This is the financial trap known as negative equity, and it may prevent you from selling your car or trading it in early.
2. Credit Approval Issues: If your credit is less-than-perfect, you may have more trouble getting approved for financing without a down payment, as many lender require them.
3. Long-Term Risk of Negative Equity: although you will have more cash on hand in the short term because it didn't have to be put toward a down payment, you will face an increased risk of owing more on your vehicle than it's worth. This is the financial trap known as negative equity, and it may prevent you from selling your car or trading it in early.
by AutoLoanGuru
AutoLoanGuru
I am an automotive journalist and expert is everything from used car sales to auto financing for people with bad credit.
- 3 featured lenses
- Winner of 4 trophies!
- Top lens » The Best Motorcycles for $1000
Feeling creative?
Create a Lens!
