BENEFITS OF A DOWN PAYMENT

#1: Improve the Likelihood of Approval

 Getting approval for a car loan can be difficult, especially if you don't have great credit. When you lower the amount that you're asking for, it can make it easier for you to get approval.

Additionally, there are subprime lenders that want to see a down payment as a gesture of good faith. It proves that you're vested in making the payments.

Especially if you have to work with subprime lenders to get approval, you'll want to make at least some kind of down payment - though the more you can afford, the better it will be.

#2: Offset Depreciation

The moment you buy a vehicle, particularly a new one, you're going to experience depreciation. After all, as soon as you drive it off of the lot, it's no longer a new vehicle. A down payment will, however, allow you to close the gap between what you owe on the loan and what your vehicle is worth.

When you make a large down payment, you reduce the time your vehicle spends holding negative equity. In some instances, the down payment (if sizable enough) can even eliminate it.

#3: Lower Your Monthly Payment

You may be focused on getting monthly payments that fit within your budget. The general rule of thumb is that for every $1,000 you put down, it will drop your payments by approximately $20. Of course, this can vary based on the cost of the car as well as the APR of the loan.

You should only put down what you're comfortable with. You certainly don't want to drain your savings account just to have a more affordable payment. With the help of a dealership, you can learn what your options are. Once you identify how much you can afford to put down, the finance department can show you monthly payments based on a few terms.

#4: Qualify for Better Terms

There are a lot of terms that you'll want to consider when getting an auto loan:
• Interest rate
• Length of loan
• Model trim

Some dealerships will have specific specials that require you to put down a minimum down payment as a way to qualify. This could allow you to get an upgraded trim level or any other promotion.

Additionally, larger down payments can qualify you for a lower interest rate or qualify you for longer terms. Of course, longer terms can also lower your payment. For example, you may be able to qualify for a 72-month term instead of a 48-month term.

Even making a down payment on a lease can ensure you get better terms.

#5: Save Money on Interest

One of the biggest things you have to think about when buying a car is how much you're going to pay in interest. As long as you're financing, you're going to pay something in interest - though your goal is to get the lowest interest rate possible.

When you make a down payment, you reduce the amount that you actually have to finance. Then, when you take a short term, you're only making payments for as long as you absolutely have to. Depending on the terms of the loan, a few thousand dollars down can save you a considerable amount of money.

Learn About Financing Your Next Car Now

If you're going to finance a car, it's important to think about a down payment. How much can you afford and how much will make a difference when factoring in the cost of monthly payments? By working with the finance department at John Thornton Cadillac, we can answer all of your questions.

Start browsing our inventory online now. Once you see a car you're interested in financing, visit us in person or schedule an appointment to talk to us. Our entire team will work with you to find an affordable option that fits within your budget.

Can I still get a car loan if I have a poor credit score?

Yes you can. Our dealership works closely with a number of different lenders that provide financing on new and used vehicles for customers with a wide set of credit scores. Whether you have bad credit or are just now building your credit, our finance department can help you work with you to find an option for a new or used vehicle that meets your budget. Give us a call for more information about auto financing and approvals or complete our online credit application here on our website.

What is guaranteed credit approval?

A credit score isn't the only way to get a new vehicle. We want to ensure you are able to check out a collection of options to find a new vehicle no matter your credit score or credit history. Guaranteed credit approval takes a look at your current financial situation to figure out what type of vehicle or loan is realistic for you and isn't inhibited by your credit score for an approval. 

I had a repossessed or bankruptcy in the past, am I still able to get a new vehicle?

Having a bankruptcy or losing your vehicle to a repossession in the past will not disqualify you from getting a new vehicle now. Our dealership works closely with a variety of different auto financing sources that will present you with different options for financing on a new car. No matter your situation we will do all that we can to get you a new vehicle at a price that is affordable.

I am upside down on my current vehicle, can I still trade it in?

If you currently owe more than your vehicle is worth, that does not mean you have to wait till it's paid off to trade it in for a newer vehicle. Our friendly team can look at your current vehicle with you and present options to work with your current loan to get you a new vehicle.