How To Get A Car Without A Down Payment : In many parts of America, going to and from work every day means having a car. And if you’ve been looking for a new or new car for yourself, you know how expensive it can be to get one. The high tag cost of a new car can mean a substantial down payment (common sense says 10% or more), which can be difficult to pay.
Fortunately, you can get on a new vehicle without a large down payment – or any down payment at all. Here is what you need to know if you decide to skip the initial payment of a car:
- You will pay more each month or you will need a longer loan term to keep costs down.
- You will need good credit to get the best rates (and sometimes to qualify without a down payment).
- Beware of dealer offers of “zero percent advance annual percentage rate (APR),” for which some buyers actually qualify.
How can you get a good deal without a down payment?
Verify your credit rating
Before applying for any type of loan, you should start by checking your credit rating, since a better rating usually means a better loan. It is a good idea to review your credit report (which is where your credit rating comes from). You can get a free copy of your credit report at Annual Credit Report.com , which allows you to access your credit information from the three credit bureaus: Experian, TransUnion and Equifax.
Once you have a copy of your credit report, it is important to check it for errors. If you find an error, you must correct it before applying for a loan, because a black mark on your credit can have a big impact on your rating.
Decide What You Can Pay for a Car
That new $ 36,000 SUV can be tempting … but it’s probably not a practical purchase if you’re struggling to pay a down payment in the first place. Consider how much money you can spend on a car payment each month and then use a calculator to find out what that means for the total cost. Enter your ideal monthly payment into a car loan calculator to see what you can afford, and try different time frames to see what works best.
Remember to be honest with yourself about what you can afford and not stretch your monthly budget to the limit. If in doubt, point to a slightly lower monthly payment so that you have some extra cash to save, or just in case of an emergency.
Do not forget other expenses
Even if you know how much you can afford each month, you should remember that the cost of the car is not the only cost of ownership. Remember that you will have to pay for gas, insurance and repairs, and these costs vary from one car to another. Before buying, you should also consider these costs:
- the number of miles per gallon the vehicle gets, which tells you how much you are going to spend to keep your car running.
- Insurance costs, which you should consult with your insurance agent in advance.
- Repair costs, which can vary greatly depending on the brand and model. Use the Consumer Reports repair calculator to see how much the vehicle you are considering in maintenance will cost over time .
Set up your financing in advance
You have verified your credit rating and decided how much you can pay: now is the time to apply for a loan. Getting your financing before going to the dealership will allow you to get a good deal and avoid a difficult financial sale while you buy the car. In addition, you will have to do some research to find a lender that offers you a good loan without a down payment.