How to Find a Car Loan With no Down Payment

By Brown Articles Published 05/29/2011 | Auto Loans

It is not easy to buy a car from scratch nowadays with all the bills we have to keep up with and to gather enough money for the first down payment when purchasing a car is no easy task. If you come under this category and have no means to afford a down payment for the purchase of your car, then do not worry for there are now quite a few car loan companies that do not require a down payment.

However, before you launch into the purchase of a car with one of these companies and ask for a hundred percent coverage on the cost of a car make sure you consider some important issues.

 Down payments are generally preferred by loaning companies as cars rapidly depreciate in price, thus meaning that someone applying for a zero upfront down payment will actually be paying more than the car is worth. Those who can afford a down payment are also considered low risk for the loaning companies and therefore find it easier to find a company who will finance their project.

This means that if you are applying for a loan without a down payment your repayment interests will be higher than those who can offer money upfront. If you cannot afford a down payment you will therefore need more money to pay back the entire sum and monthly repayments will be higher as a result.

There are however advantages when you do not need to find money for down payments, which amongst others is the fact that you will be able to obtain your car immediately without having to spend a dime. For some people down payments are a sheer impossibility this is why zero down payments are the only solution.

If you already have a car and wish to trade it in to get a new one, this will actually act as a down payment and can offer you better options as far as the interest rates are concerned. This is a good position to be in as it will allow you more benefits as you will be able to give a guarantee without having to actually forward any money.

If you cannot afford a down payment then you will have to carefully choose the loaning company that offers this kind of service. Shop around for the best possible rates and compare the loaning companies for reliability and terms and conditions. There are plenty of loaning companies on the market now that offer zero down car loans and most of them are small enterprises, this is why you will have to delve deeper into their history and find out whether or not they are genuine.

The best way to find your loaning company is by comparing the different rates they offer and terms and conditions. Most of these loaning companies have their own websites and there are other websites that offer comparisons for you to check on. Make sure you also look into the reviews and find out whether they are genuine and reliable, only then choose your loaning company.