Car loan with zero down payment !!!
Purchasing a car has become a passion for many today. People who have passion and love towards these luxury items keep on upgrading their old models with the new arrivals. Not every arrival in the market can be purchased with complete down payment. You may want to go with auto loan to arrange your finances in a better way. During recent times, India has witnessed steep demand for cars with the companies assuring finance up to 100% of the ‘on-road cost’ of the cars. Car loan schemes offered by the banks today are enabling the customers to own their dream car easily however, deciding on right car loan/ lender turned out be challenging for many. Now, question at this juncture is should you move ahead with purchasing a new car with zero down payment?? The answer is strict No! No! Let me explain you the reasons why?
“Purchase your dream car with zero down payment” This is a tempting offer given by the car dealers to checkmate the effects of demonetization on their sales number. Down payment is a major hurdle for many who wanted purchases their dream car. Undeniable fact is that it is advantage given to many who cannot afford for car down payment bust wish to own a car, it has disadvantages too.
Loans processing agencies today urge their customers to go for car financing with large down payment possible for many good reasons.
Dealing with down payments
When you car loan with largest down payment, you will have good chances of completing it successfully and health of your credit score will remain intact.
- Many car finance companies like banks insist on having down payment for cars to make sure that the lenders will make prompt and regular payments.
- If the auto finance is issued with zero down payments, the borrower is investing no money in the first two to three years where the car holds real value to the loan amount issues. The lender is at higher risk of losing quite bit of money if the borrower walks away from loan. To compensate the risk, the lending bank is going to keep the interest rate high which again compels you to pay high monthly installments. Most of times, lending companies issue secured auto loan where vehicle you intend to buy is kept as collateral while issuing the loan.
- As the car loan interest rate of this Zero down payment auto financing is high, you may face tight budgets and end up defaulting the loan after a period of time. You are at the risk of losing the all the money that is paid till date and your loving car too.
- Large down payments not only keeps your car loan interest rates low but also reduce your loan tenure which will keep you away from negative equity.
- The best part about large down payments is, total sum you barrow from the lender is low and you will have good chances of approval.