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Benefits of a Down Payment 

Purchasing a vehicle is an important decision, and you'll have options when it comes time to set up a loan. One of those options is deciding if you'll put money towards a down payment and how much it's going to be. While it is upfront money coming out of your pocket, it's important to understand how it can benefit you in the long run. Here at Gandrud Chevrolet, we make it easy for our customers to see its importance.
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Understanding The Reason Behind A Down Payment On A Car Loan

For those with less than perfect credit, a down payment can give creditors more confidence in your ability to make the monthly payments. It also makes your chances of approval higher because you'll be applying to borrow less money. It can give individuals who want to build better credit an opportunity to prove trustworthiness.

What Are The Benefits Of A Down Payment?

Putting a chunk of money toward your auto loan isn't just to prove you're able to handle a monthly payment in your budget. Let's take a look at some significant reasons why it's a good idea.
  • Save money on interest- Even with a low APR, you are still paying more every month because of interest charges. If you pay some of that loan right off the bat, the total amount you owe gets reduced, which saves you more money as more time goes by. Take this example: If you took out a six-year loan of $25,000 with 4% interest, it would be $6,000 in total. Reducing the amount you owe can reduce the interest amount as well.
  • Can give you options for different terms- Paying off your auto loan right away can help you qualify for longer terms should you want a smaller payment stretched out over a longer time frame.
  • Helps with depreciation- New cars depreciate as soon as you drive them off the dealership lot. You can reduce the difference between the amount you owe on the loan and how much the vehicle is worth with a down payment. While it might be a small inconvenience to pay this sum of money right off the bat, you'll have better success in later on either selling your vehicle for a higher price or getting a better offer for a trade-in.
  • More affordable monthly payments- While it might not seem like paying a larger sum of money off the bat is good if you're on a budget, this helps lower your monthly payments throughout the loan. Having a payment that 50 to 60 dollars a month lower every month can allow you to feel more comfortable about taking on the loan.
  • Provides confidence with making a payment- You may not be used to having a car payment if you've paid off your loan a while ago. Having a new car payment allows you to adjust to making timely payments as part of your routine that gets added to a regular bill.

Is There A Magic Number When You're Making A Down Payment?

There isn't a one size fits all approach to a specific cash amount to put towards a down payment. Having to pay a certain amount can become intimidating, but in reality, it's what you can afford. Our friendly professionals work hard to help every customer who walks through our facility with a payment that makes sense for them. We make it a point to establish a trusting relationship for our clients for the long term.

How Gandrud Chevrolet Can Help You Make The Right Decision

We understand that every customer that comes to our location wants to achieve a specific goal. Whether you're buying new, wanting to have a lease, or you're looking to get a reliable pre-owned option, we have the answer here for you. More importantly, we always work to go above customer satisfaction because we always have your best interest in mind. If you have any questions regarding a down payment on a vehicle, we would love to discuss it in further detail with you. Feel free to either give us a call or stop in to our location in the Green Bay, WI area for a welcoming team of professionals who are always ready to serve.