Down-payment in car loans: Yay or nay?

06 September 2021
Anindya Mutsuddy

A car is a significant economic decision for most people. Like other loans, there are a number of ways you could take out car loans, which is why we always stress that the individual checks out all of the options available to them. Today, we’re going to take a good look at one of these options in particular: the down-payment.

Buying a car without a down-payment

So, what does a car loan without a down-payment entail? It’s simple, you borrow ALL of the money that corresponds to the value of the vehicle itself. This basically means that you can immediately get the ride of your dreams, without having to save up some funds for the down-payment.

The vehicle is a hundred percent funded by the car loan. Do keep in mind that it is easier to get financing for new cars that do not involve a down-payment. It’s the opposite for older cars. Older cars usually require a down-payment. It’s not impossible though, to get down-payment-free financing for old cars, so, do keep a watch out.

Go down-payment free or negotiate a lower interest?

While it can be very tempting to go the down-payment route if you have the funds sitting somewhere, you could also opt to try to negotiate the interest rate to further bring it down. Remember, the lender doesn’t just use the value of the car as base to offer the loan. They also take a look at your creditworthiness, your financials, assets, so on and so forth.

If they are in order, then you could try a negotiation stream. Do note that you’d be hard pressed to try and beat an already low rate. But for loans with higher interest, there’s room for negotiation.

For more information on car loans,do check out

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