Financing a Used Car with a Low Down Payment

May 3rd, 2019 by

Etiquette is not just a fancy-sounding term for manners – it’s a word that describes proper ways to act in certain situations. In most cases, this protocol is there for a reason. Even in something as mundane as purchasing a car, etiquette still applies. One such rule for buying a vehicle is that a person should put a 20% down payment on it in order to make the payments more comfortable for their financial situation. This piece of etiquette arose out of both common sense and misinformation. It makes sense that paying as much as you can on a loan up front is the best way to save money. However, over time the 20% rule was fueled by misguided ideas about car salespeople.

We’ve all heard these ideas. The myth of the “lemon” car being sold to an unsuspecting car buyer. Whisperings of high interest rates and repossessed cars. Worst of all, the ghost of the “sleazy car salesman” still haunts modern lore about used car purchases, and fuels the idea that we need to make a substantial down payment before we go about purchasing a car. However, sometimes we don’t have that down payment handy when it comes time to buy a new vehicle. Perhaps you were in a car accident and your insurance company refuses to pay for the damages or maybe your car just refused to start one morning, and that was the last straw. Whatever the reason – you don’t have to risk missing out on work and routine life for months by scrounging every penny to make a down payment. There are ways to finance a used car with a low down payment.

Start By Working Out a Budget for Yourself

Figuring out a budget when your life is already stressful is a hard thing to do, but it is, unfortunately, one of the first things that you should do before you even think about getting a new car. Start by writing down your net monthly paycheck – meaning what you make after taxes on each paycheck. Then, work your way through your monthly expenses: rent or mortgage expenses, insurance, loan payments, groceries, children, and pets. See how much of your monthly paycheck is left after you go down through those expenses. This is potentially what you have to work with for monthly payments, and this is something you can bring to a financing expert at a buy here pay here dealership. This will help them figure out what type of car you’ll be able to pick from their lot as well as how much they’ll be able to give you in a loan amount.

Budgeting not only helps you stay grounded when it comes to your next car purchase, but it can help clear a busy mind and prepare for the future if you are feeling down about your financial situation. If budgeting does not come naturally to you, however, you can still use a general idea about how much money you make each month to fuel a car purchase.

Next, Go to a Buy Here Pay Here Dealership

To get buy here pay here financing, your next stop is to visit a dealership. If you live in Independence, we recommend driving over to Auto Now of Independence. We have multiple locations in Kansas and Missouri, which means we have the most extensive selection of cars in the area – which will ultimately help you find the vehicle that you need.

When you reach the dealership, you’ll get squared away with a salesperson. If you filled out an online application before this meeting, you’ll meet with a salesperson to go over the amount that you are being offered for in-house financing. If you’d prefer to fill out an application in-store, then the salesperson will likely ask you about things including what you do for work, how much money you make, and how much you pay each month in bills. Most buy here pay here dealerships, including Auto Now of Independence, do not require that you have a squeaky clean credit history. They understand that things happen and are more than willing to help you find a way to finance the car you need.

The car salesperson will work with your financial needs to figure out a payment plan that will work for you. In most cases, it is fine to finance a car through a buy here pay here establishment even if you cannot afford a 20% or higher down payment. They’ll figure out how much of a down payment you can afford on your budget and will apply a payment plan accordingly. This will likely mean that you end up paying more on your payments, but it will make the initial payments a little more reasonable, leaving you with more in your wallet for the other things in life that you need.

Pay Off What You Can When You Can

The best part of financing a car with a low down payment is that you still get the chance to build up or repair your credit while you make payments on your vehicle. The agent you work with at the buy here pay here dealership will create a payment plan that is ultimately comfortable for you, but that doesn’t mean that you have to pay that amount. If you get a bonus at work, a promotion, or a little extra spending money for your birthday, you can take that and apply it toward the overall payment of your car. On time payments build up your credit, but paying more than the amount due is also a great way to boost your credit score in a short period.

Are you ready for a new car but don’t have the funds to make a big down payment? Don’t worry about it. At Auto Now of Independence, you can choose from a selection of quality used cars without the need for a substantial down payment. Fill out our online application for a closer look at what we can do for you on your monthly budget. Or, stop by our store at 10500 US 24 in Independence. One of our dedicated car salespeople will help you figure out a way to afford a car that works for you on a budget you can get behind.