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The Cost Of A Down Payment On A Car In Simcoe

The Cost Of A Down Payment On A Car In Simcoe

When you’re considering buying a new car, you have lots of think about. Not least is how much is the cost of a down payment and how long you give yourself to save for one.


Unless you have savings already, you face a dilemma. Do you wait to buy the car while you save more for the down payment, or do you put down less and borrow more?


Our Simcoe car loan team offers their opinion.


Simcoe car loans and the cost of a down payment


More is obviously better when it comes to down payments. The more you put down the less you have to borrow and the higher the chance of being accepted for the loan.


But if you have to save for that down payment, how long for how much?


The short answer is as long as possible.


The higher the down payment:


The higher your chances of being accepted for the car loan – Down payments show commitment, which lenders like. A borrower with a lot of their own money at risk is less likely to default than one with none or very little.


The smaller the loan – Putting down more means borrowing less. This also improves your chances of being accepted for the loan, within reason, but also means lower monthly payments and a less expensive loan.


The lower the interest – Interest rates vary a lot and some smaller loans will come with higher rates not lower ones. However, borrow less and you’ll pay less interest so it will still come out cheaper.


More equity in the car – Going upside down on a Simcoe car loan is part of buying a new car but you could avoid it altogether with a larger down payment.


How much is enough?


There is no hard rule about down payments but we generally recommend at least 20% down payment for new cars and 10% for used ones. If you can go higher, we recommend you do.


As to whether to wait to save, that’s entirely up to you.


If you have time on your side, we would recommend saving up as much as you practically can and then getting a loan for the rest. There comes a point when the benefit of saving becomes a burden, if your old car keeps breaking down for instance.


That’s a judgement only you can make.


Use a car loan calculator, work it out for yourself or discuss your situation with one of our Simcoe car loan team. They can all help you make informed decisions about your purchase.


Don’t worry if you cannot save much for a down payment though. Our team has access to a wide pool of lenders who will lend to people from all walks of life, in all kinds of situations, including smaller down payments.


It will mean a larger, or perhaps longer, car loan but we can still get you what you want.


If you need help or advice on anything to do with auto loans in Simcoe, contact Car Nation Canada today, we can help!


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