When you’re interested in financing a new vehicle, a down payment is a huge asset. It can help in more ways than one, including keeping your monthly payments reasonable. Our Chevy finance experts at Foundation Chevrolet are providing an inside look at the importance of a down payment.
Do I Have to Make a Down Payment?
In short, it depends. Some buyers will need to make a down payment to demonstrate their buying power. However, some buyers can finance a new vehicle with little or no down payment at all.
How Much Should I Pay?
As a general rule, you should aim to make a down payment of at least 20 percent. This is typically the amount that lenders are looking for. If you’re buying a pre-owned vehicle, however, you can aim for around 10 percent instead, since they don’t depreciate as quickly.
What are the Perks of a Down Payment?
While a sizeable down payment isn’t required, there are many perks to making one. For starters, since new vehicles depreciate so quickly, you run the risk of developing negative equity, also known as being upside down in your loan. Plus, you’re limiting the amount you need to finance, which reduces how much interest you’ll pay overall.
Can I Use My Car Instead?
If you prefer, you can certainly use your vehicle as a trade-in instead. However, it’s important to first understand how much positive equity you have in your vehicle. If you have an existing lien, you’ll need to know the exact payoff amount for your loan. Then, you’ll need to determine the trade-in value for your vehicle.
Finance a New Chevy Vehicle in Wheat Ridge, CO Near Denver
When you’re ready to apply for financing, we can help. With our streamlined financing process at Foundation Chevrolet, you can secure a loan in no time. Contact us to get started today!
