One
thing that remains on the minds of car buyers is solving the dilemma of
down payment. Does the dealer require you to make a down payment? Are
bad credit car buyers compelled to make a down payment? Is it really
necessary? When the issue of down payment is occupying a fair share of
your troubles, it is best to address it so that you can move along the
process of buying a car.
Why Dealers demand Down Payment from a Car Buyer?
Dealers
are interested in selling their cars and earning commission. They do
not care how the money is paid? Most dealers have no part in the
financing process. If you do not have a pre-approved auto loan,
they can help you find an auto loan in the form of dealership
financing. But, how much down payment you make is not their concern.
The
amount of down payment depends on your loan amount. If the lender
approves you for a loan amount that covers the total cost of the car,
you do not have to think about the down payment. Usually, lenders offer
70% -80% as LTV for your car. It means you have to bring money for the
remaining amount.
Lenders
demand higher down payment when your credit score is not excellent. A
bad credit car buyer has a history of missed payments and it manifests
higher risk to the lender. In order to reduce the risk factor, he may
ask you bring at least 20% down payment.
What to do when you have no Money for Down Payment?
- Use your Old Car
If
you own a car without any lien on it, use it to reduce the cost of your
new car. A cash down payment is not necessarily the only option with
you. You can trade-in your old car and avoid making down payment to the
dealer. If the dealer is offering little for the car, you can sell it
online or find a private car buyer to earn more money.
- Ask for Financial Help from Parents
If
you are in college or starting your first job, you will not have
adequate savings for buying a car. You can ask for financial help from
your parents. Many parents intend their child to have a good credit
score. They want him to understand the importance of managing financials
properly. And, a car can be the best way to teach financial
responsibility. So, do not shy away from asking for help.
- Use your Cash Gifts
You
may have received cash gifts for your birthdays, graduation, wedding
and other important events of your life. You can buy a car by breaking
into your savings. Use the cash and reduce the loan amount. If your
credit score is poor, it is best to lower the loan amount and thereby
pay reduced interest.
- Sell your Stuff
Organize
a yard sale or sell your stuff online. It is a way of getting rid of
unwanted stuff and earning money from it. Gather all the items that you
do not use or will not use in the future. De-clutter your room, clean
the garage and remove old items from the attic. You can even ask your
family, friends and neighbors to donate their stuff for your sale.
- Pick up Odd Jobs
If
you can pick up an extra shift at your current job, consider it for
increasing the down payment amount. If you are still studying and cannot
manage a full-time job, pick up a few summer jobs to add to your
savings. Think of different part-time jobs such as baby-sitting,
lawn-mowing, house-cleaning, etc. to earn a few extra bucks. Just as
drops can fill an ocean, several different jobs can help you make a down
payment.
No Money Down Auto Loans solve your Urgent Car Buying Need
There
are different ways of managing the down payment for a new car. But,
every option requires time and effort. If a car is a necessity for you,
you cannot wait to save money. When owning a car is the difference
between a regular job and unemployment, you must not spend any time in
managing down payment. In such a situation, you need a quick-fix
solution in the form of no money down auto loans. The loan program helps
bad credit car buyers in making faster car purchase.
Seek online auto financing companies that offer no money down auto loans to bad credit car buyers.
It is best to discuss your need for quick approval with the lender.
When you are buying a car with no money down auto loan, remember to
choose an affordable one. It will ensure a low loan amount and help you
to make regular monthly payments.
Do
not let your bad credit history a reason for avoiding a car. Forget
worrying about down payment. CarDestination.com helps you in obtaining
no money down auto loans even with bad credit score. Apply now for a low
interest on your next bad credit car loans with guaranteed approval.
