When it comes time to purchase a vehicle, ideally you could pay the entire amount without borrowing a single penny in order to do so. However, that’s not always possible. 

If you can’t pay cash for a vehicle, a perfectly acceptable option is to have plenty to put down up front so that you’re only borrowing the minimum amount. Even if you have a trade-in vehicle that helps to reduce the total price paid, put some additional money down anyway.

There are several reasons why this is a good idea and why it’s highly recommended. First, your payments will be considerably less than they would be if you borrowed the entire amount. Second, you may save on interest if the entity that is financing the purchase will offer a lower interest rate for a shorter borrowing time. A sizable down payment should allow you to take out a loan for a shorter period of time and realize the benefits of doing so, including a lower interest rate.

Perhaps your credit score isn’t quite what it used to be, and you are concerned that you may not be able to easily find financing for your purchase. With a larger down payment, the lender that is providing the loan to you has less risk involved on their end. Because of this, they may be more willing to approve the loan since the vehicle that is used as collateral would be worth more than the amount borrowed. 

Of course, before purchasing a vehicle, it’s best to shop around for the best rate before heading to the dealership. Most lenders will base their decision to extend an offer of credit based on several factors, the primary of which is your credit score. 

With this in mind, you’re going to love this one. Our friends over at SmartCredit are offering you an exclusive 7-day trial offer of their flagship service. 

Just head over to smartcredit.com/followme to grab your 7-day trial offer. With SmartCredit, you’ll be able to not only control your future credit score but also see your very own SmartCredit Report as well as take advantage of $1 million of fraud insurance to cover your entire family. God bless.