Many Canadians are not able to purchase a vehicle with cash upfront. So, they take advantage of car financing. Car financing is the process by which an individual can access a loan to purchase a vehicle.
While there are lenders will not give you money to cover the full cost of the purchase. You must have a down payment to secure a loan, there are those who will give you an auto loan with zero down. But before you decide to skip the down payment, here are some things you should consider:
The upsides of no down payment
If you decide to skip the down payment while accessing a loan, you will then have more money available for things such as paying off debt and making important purchases. If you are putting some money down, it is advised that your down payment be around 20% of the vehicle’s price. It can take a while to save that amount depending on the price of the vehicle. By skipping the down payment, you can get behind the wheel of your new car sooner rather than later.
The downsides of zero down
While skipping the down payment may seem like a great option, there are some downsides. Without a down payment, you will have to borrow more money which will mean higher monthly payments. Another way of skipping the down payment may cause you to pay more each month is that zero-down auto loans normally come with higher interest rates. This is because when a lender offers you an auto loan without a down payment, they are taking on more financial risk. This is also the reason it is harder for you to qualify for a zero-down auto loan, especially with a bad credit history.
You should also note that cars depreciate very quickly and if you skip the down payment, you could end up owing more on your car loan than the vehicle is worth in a few years. If you decide to trade or sell your car, you may need to pay money out of your pocket to clear your loan.
Do you need car financing in Surrey?
If you need car financing in Surrey, contact us at Instant Auto Loans. Instant Auto Loans is a family owned and operated automotive financial institution that has been providing courteous and confidential service for over 30 years. Whether you have a down payment or not, we will offer you car financing based on the equity in your vehicle. Our car loans are short term, easy to qualify for and straight-forward to repay. We also have some of the best rates in the short-term lending industry.
At Instant Auto Loans, our loans process involves three simple steps and you can be approved for the cash you need in less than 15 minutes. So, what are you waiting for? Give us a call today or apply now online.