Benefits of a Down Payment

Nothing is more exciting than shopping for a new car. No matter what choice you make, there are always options when it comes to financing your vehicle. One of those critical decisions is if you'll make a down payment towards the loan. There are some factors to consider, such as credit history, your income, and what kind of vehicle you want. Our experts at Palm Springs Hyundai are here to guide you every step of the way. Find out why making a down payment is a wise decision.

Why Decide To Have A Down Payment? 

Most people probably don't enjoy the idea of using a chunk of their money right of the bat to pay help pay for their vehicle. What may seem inconvenient at first, the long-term benefits far outweigh the initial capital you'll spend. Here are a few reasons why it can help:

1. A down payment can help you get approved for a loan- If you are a little worried about your credit, committing to put money towards your loan can show lenders you want to take the responsibility of a car payment. 
2. Down payments can reduce the length of your loan- Even with excellent credit history, you'll still end up having to pay some interest on your loan. Reducing the amount you owe will ultimately save you hundreds or even thousands of dollars of interest. Additionally, you'll enjoy the perks of having no car payment once your loan is paid off.
3. A down payment will reduce your monthly expenses- Ultimately, a car payment is a monthly bill that you'll need to integrate with the rest of your responsibilities. Saving 50 dollars a month towards your bill might not seem like much, but it quickly adds up, especially if you have a longer-term loan.
4. A down payment can help with depreciation- New cars are great, but one of the downfalls is that they depreciate incredibly quickly. More specifically, they can lose up to one-quarter of their value in the first year. You can help offset this issue by making a down payment. Without putting money towards the loan, you could risk owing more than the vehicle's actual value. 
5. A down payment gives you the confidence to handle a new bill every month- If you're the kind of person that likes to stick with one vehicle for a long time, you'll likely come to a point where you don't have payments. Contributing with a down payment can help get you back into the swing of adding in a new bill to integrate with your budget.
6. You'll have more success with future vehicle loans- The average person will own about ten cars throughout his or her lifetime, so this won't be your first rodeo when it comes to financing a vehicle. A down payment will not only prove your reliability with loan approval, but you'll know what to expect the next time you're in the market for a car. 

What Amount of Money Should Be Used For A Down Payment? 

 Generally, better credit means you might not have to put money towards a down payment, but it's still a good idea. If you can afford it, aim for about 20 percent on a new car or 10 percent on a used one. If those figures aren't possible, do what you can fit comfortably within the means of your budget. Our experts can help you go through your options, along with estimating your monthly payment based on the amount you plan to put on the loan. Keep in mind there's no "one size fits all" approach for a specific down payment amount, and we're here to help ensure you get what you need. 

How Our Finance Team At Palm Springs Hyundai Can Help

We help people from all walks of life with all different situations. It's our goal to make sure your vehicle fits seamlessly into your lifestyle. Our job is to make sure you get matched with a car that won't be too difficult to manage financially. If you succeed, we succeed. You may have questions about buying, leasing, or how to use the money to put towards your next vehicle. These are all valid questions that we're more than happy to explain in further detail with you. When you're in the market for a new or used vehicle, we've got you covered in all areas. Give us a call today to schedule a reservation with one of our dedicated members or stop in and see us at your convenience.