There a few reasons why down payment is important, all to the customer’s benefit, regardless of whether the customer has bad credit or not.
1. Uncle Sam: This dealership pays your taxes for you up-front. This means that a chunk of your down payment has to pay taxes before hitting the balance. When you take out a loan you pay interest. The bigger your down payment is upfront the more money you will save on interest.
2. The bigger they are the harder they fall: The larger your down payment, the lower your monthly payment will be and the more money you save over the long run.
Let’s say your taxes up front are $500 on a $7,000 car and you put $1000 down. That takes the note down to $6500 because you’ve only put $500 down after taxes.
So, the more money you put down the more you’ll save over the long run. $1500 down would take a pretty big chunk out for you up front and set you up to save a lot more money.
Now imagine if you had $2000 or $2500. Putting that much money down would save you anywhere from $50-$100 a month! Multiply that by 12 and that comes out to savings of $800-$1000 a year you could be using on something else.
3. Monthly payments: After you’ve paid your taxes then whatever you apply towards your principal determines your monthly payment.
Depending on how many months you’ve decided upon, your payment will vary. At the dealership, I work at we don’t go any longer than 36 months. Why? Well, to benefit the customer. Cars lose value faster than any other big purchase you make over your lifetime. The faster you own your car, the less you’ll lose and the more money you’ll save!
4. Low down payments: We still accept a low down payment up front. Because we give you 60 days for your first payment and 45 days for a down payment it gives you time to get caught up and save. Dealing with bad credit can be exhausting. That’s why it’s important to make it as simple and straightforward as possible. We work with all types of bad credit and no credit. If you have any questions please call us at (303) 623-1926 for more information.