If you need a new car but don’t have time to save for the down payment, can you still get one? What are the downsides of financing a car loan without a down payment?
We asked our Bronte auto loans team to outline how and why you might want a car loan without a down payment and the downsides of getting one.
Car Loan without a Down Payment in Bronte
A no deposit auto loan isn’t the ideal situation to be in. You’ll be paying more interest as the lack of a down payment is a higher risk for the lender, which they will charge higher interest to cover.
You are also more at risk of going upside down if you’re buying a new car.
However, if you need a car now, you can definitely get one. We would recommend doing the following first though.
Improve your credit score
Your credit score will heavily influence how much interest you’re charged for your loan. Therefore, as much as time allows, do whatever you can to improve your score.
Pay down debt and pay off credit cards to lower your debt to income ratio, make sure to never miss a payment, pay everything using automatic payments and check your credit report for errors and omissions.
If your score needs a boost, make sure to use a credit card regularly and cover all payments each month.
Consider using an auto loan cosigner
An auto loan cosigner can help lower the interest rate you’ll pay and improve your chances of being accepted for the loan.
As long as you know someone who trusts you enough to come in with you and guarantee the loan, you could get a lower rate.
Just make sure they know what they are getting into, that they have a good credit score and know that if you default, they will have to take over the payments.
Consider buying used instead of new
Securing an auto loan against a used car instead of a new one should mean a much lower amount you need to borrow. This has obvious benefits for affordability and for making the entire loan cheaper.
Depending on the lender, used car loans can be more expensive or cheaper than those for new cars so make sure to shop around.
Invest time in saving
While we appreciate that your situation may not allow for it, delaying the loan for a few months while you save even a modest down payment can make a big difference.
Anything from 10% upwards makes a difference to the interest rate you’ll be charged.
Work with auto loan experts
Working with auto loan experts like Dixie Auto Loans can also help. We have access to a wide pool of lenders who offer competitive rates to people in all kinds of situations.
We also have access to a range of no down payment auto loans that could give you the car you need at a price you can afford.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!
For any questions or concerns, please don’t hesitate to contact us here!