Why $500-Down Doesn’t Go Far – Car Buying Explained
Nothing makes a current vehicle seem old and unreliable more – than the thought of replacing it with something shiny and new. Once you’ve caught the “car-buying fever,” turning it off can be very tough.
In a perfect world, you’d walk into a dealership, point at a car you like and drive it home 20 minutes later. It’s rarely that simple though, especially when you’re on a tight budget. Let’s go over a few common things to remember when looking for a quick, easy experience.
- Bring a current drivers-license – Even the most common items can be forgotten. Do yourself a favor and double-check the expiration date before leaving the house.
- Compare insurance quotes prior – Don’t spend hours settling on a price you can afford, only to discover that insurance payments are too high. Contact a few providers before you start your search for a better idea on the costs.
- Bring your income statements – Lenders like to see that you can afford a vehicle payment. Providing an official income statement can make the process much quicker.
What about down-payment?
Even if you have the basics listed above, that doesn’t guarantee you leave with a new car – often a down-payment is required. Why? Let’s take a look at a few reasons providing a down-payment can benefit you:
- Money talks – A down-payment shows you mean business, it’s as simple as that. When lenders see a large down-payment, they’re more likely to approve a loan or offer better terms.
- Lower monthly payments – The smaller the loan, the lower the monthly costs. Additionally, cash up front also lowers the amount of taxes and interest you pay over time.
- Better equity position – If you owe less money on your vehicle than it’s worth, that’s a great thing. Not only does it give you more control, but it also makes your next vehicle purchase even easier.
OK – I have $500
While a $500 down-payment might seem like a decent number, it rarely affects whether a loan is approved. Monthly vehicle payments are often between $200-$500, not including insurance. Show lenders you’re a safe, reliable person that means business. Usually, 20% of the purchase price is enough to instill confidence.
Not quite there yet? There’s still hope, we handle situations like this all the time.
The Shannon Advantage
We operate a little differently here at Shannon Motors – we believe that everyone has the right to own a quality, reliable vehicle – without the negative aspects usually associated with a pre-owned dealer.
We offer no-hassle financing options, free trade-in inspections, and include up to a 24 Month/24,000 Mile Limited Warranty* on every vehicle we sell. It’s no wonder that we’ve been awarded the New England Independent Auto Dealer Association Dealer of the Year award not once but twice. We’ve learned a lot over the last 40 years, which is why we offer a huge selection of quality pre-owned vehicles. We invite you to visit any of our 4 locations in either Johnston, Providence, Woonsocket or Somerset.