Making a down payment is one of the most important steps to purchasing a car. There are not many options around it. You can’t take out a loan to cover one. Nevertheless, if you’re struggling to come up with the cash, you may be able to ask for down payment assistance from a car dealership.
How Does a Down Payment Work?
A down payment is the money you pay upfront toward the value of a car. The lender often determines how much you need to put down based on your credit score. Risk is a determining factor, so the lower your credit score, the higher the down payment is likely to be. Each lender has a slightly different way of calculating the amount.
The down payment also:
- Shows the lender you seriously want a loan.
- Proves your willingness to invest your money in it.
- Helps reduce the amount of money you have to borrow.
The less you borrow, the more you can potentially save in interest charges. Therefore, you can save down the road. It can be a wise move to make a larger down payment. But you don’t have to exceed the lender’s requirement if you’re unable to.
How Can I Cover a Down Payment?
As we’ve said, down payment amounts vary by lender. If you have credit concerns, they may ask for $1,000 or 10% of the selling price of a car (typically the lesser amount). Earlier, we said there aren’t many options; you can either make the down payment or you can’t. But here are the options that may be on the table:
- Make the required down payment with your own cash.
- Trade in your existing car and pay using its equity.
- Combine cash and trade-in equity to cover the upfront cost.
If your lender allows it, you could put a down payment on a credit card. However, this isn’t recommended because you’ll have to pay interest to the credit card company and on the auto loan.
What If I Need a Car But Can’t Make the Down Payment?
Most dealerships will make you feel like you’re on your own when it comes to making a down payment. But there are down payment assistance programs that can help even if you are short on cash. The finance company or manufacturer may provide you with the cash needed. They benefit by attracting more car buyers who would otherwise not be able to afford a vehicle. But that’s not the only type of down payment assistance that’s out there.
Get Car Dealership Down Payment Assistance from Hawthorne Auto Square
At Hawthorne Auto Square, we have a unique program in which you can take five months to build your down payment. Once you pay taxes upfront, your full payment is broken down into installments over five months. All you need to be approved are:
- Proof of income
- Proof of residence
- A driver’s license or ID card
We help buyers in a wide range of situations on a case-by-case basis. Your financial situation determines the down payment you qualify for. Hawthorne Auto Square works with first-time car buyers, those on fixed incomes, and people with a history of bankruptcies or repossessions.
Payment options vary as well. The length of the loan, its amount, and the down payment amount determine what options are available to you. Don’t worry about having a low credit score as far as eligibility. We can tailor our program and connect you with different in-house and outside financing options.
Shop at Hawthorne Auto Square Today
A premier used car dealership in Los Angeles, we offer many types of high-quality, low-mileage vehicles. These include cars, trucks, vans, and SUVs representing everything from base models to luxury cars, all prepared to be driven off our lot. In addition to financing, we provide warranty and maintenance programs. Continue browsing to view our inventory or visit our buy here pay here dealership to learn more. To take advantage of the down payment assistance program at our car dealership, call 866-707-7664 today.