What Kind of Down Payment is Needed to Finance a Used Car?

What Kind of Down Payment is Needed to Finance a Used Car?
By John Hayden

Purchasing a car is always exciting, whether it is from new car showroom or a used dealership. The advantage of buying a used car is that the down payment will be easier on your wallet. If you already have a small car and are looking to buy a larger model, then check out the Halifax used car market to zero in on a model with a down payment that can be offset by trading in your existing car. The ordinary down payment of purchasing a used car is at 11-12% of the sale price, as its rate of depreciation is lower than a new car. Remember the standard rule that higher down payments reduce the amount to be paid in monthly installments.

Down payment through dealer financing

Getting a loan sanctioned by used car dealerships is hassle free and easy, and you may be able to walk out with a new used car the same day. Of course, it is best to make a comparison between offers from all used car dealers Halifax before making any commitments. Sometimes if the down-payment is high, then the interest rate on installments and loan term will be less.

Down payment through bank or credit union

Though getting a vehicle loan through these agencies may take a long time, it’s a good idea to check your credit limit before searching for a car. A short-term loan may be hard on the pocket as the down payment will be high, but the interest rate will be low.  Even if you have a car that can be traded in, do not say anything about it until the dealer makes an offer on the used car of your choice.

Down payment with bad credit

Everyone goes through good and bad financial times. A short period of bad credit shouldn’t restrict you from buying a used car of your choice. There are several private lenders that give credit to people with bad credit. Remember, though, it could be at a higher interest rate if down payment is low.

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