Understanding The Down Payment Of The Car
May 27, 2022Admin
Car Purchase Standard
Many people, especially those living in small towns would like to purchase their own car, since it will help them save time. Most cars are fairly expensive, and many young people cannot afford to pay the entire car price immediately. Car dealers realize that some car buyers, especially younger people do not have sufficient savings to pay the entire amount. Hence they ask the car buyer how much he down payment he can make for the car, so that the dealer can arrange to finance the car. The car buyer should Understand the down-payment of the car, so that he can plan the purchase of the car accordingly.
While some banks and lenders will allow their regular customers to purchase a car with zero down payment, in most cases the car buyer is expected to pay at least 20% of the total price initially as down payment. He can then pay the rest of the car price in installments. This is very convenient for car buyers who are getting a monthly salary, they can purchase the car even if they do not have sufficient savings. However, the car buyer should be aware that the amount he will ultimately have to pay for the car, will be higher, since he has to pay interest on the outstanding amount for the car.
Before deciding to purchase a car, the car owner should calculate his regular monthly expenses and then deduct the amount from his salary. If he has other loans like home loans, he should also deduct the amount from his salary. This will give him the amount which is available for purchasing a car on installments, his budget for the car purchase. It is advisable to pay the largest amount possible as down-payment for the car, so the monthly installment is less. It is difficult to predict the future and if the car buyer loses his job, he may find repayment of the installment difficult.