The question of a down payment is a tricky one. When it comes to buying a house, you don't really get much of a say in the process. Normally if you are buying a home, you need to put money down. However, buying a car is a different process. It is possible to buy a car with little or even zero money down. Car buyers are quite willing to let consumers buy a used car with no down payment.
The real question for you is whether or not you should skip a down payment if you have the option.
Realize That You Do Have a Choice
Many people feel that they have no real option other than to put money down on a used or new car. It is important that you understand that this is not necessarily the case. Car dealers are willing to give many drivers zero money down and taking advantage of this offer is attractive on many levels.
Free Up Money for Other Expenses
By skipping the down payment, it is possible for you to free up that money to do other things with, such as paying down credit card debt or making vital purchases. The first question you need to ask yourself is, "can I apply this money somewhere else right now?" If you can find constructive and useful ways of allocating the money that you would spend on your a used car down payment elsewhere, this is an option that you should seriously consider.
Get Yourself Behind the Wheel Far Quicker
Another reason to skip the down payment on a used car is that it might help to get you behind the wheel of a used car much faster. If a car dealer is offering you zero percent down, then you really should consider that offer, especially if your other option is waiting to save up enough money to buy a car that you need.
Some Major Considerations
However, there are some negative aspects to putting $0 down as well. You will want to take the following points into account:
- Depreciation: If you are buying a new car, it will depreciate even more rapidly. This means that if don't make a down payment, you could owe more than the car is actually worth!
- Selling your car: If you decide to get rid of your car before you completely pay of the loan, you might have to pay out of pocket to sell or trade in the car.
- Monthly payments: It goes without saying that if you skip making a down payment, your monthly payments will be higher as a result.
If you have the opportunity to pay zero percent down, make sure that you weight the pros and cons before making the decision. Undoubtedly, both choices have their benefits, so it is a matter of deciding what works best with your lifestyle and finances.
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