When it comes to Cadillac financing, some drivers may find the process to be overwhelming. While making any big purchase can be stressful, equipping yourself with knowledge about the financing process early on can help ease the tension. This guide is all about down payments and why they’re so important when financing your next vehicle.
Why Are Down Payments Important?
Down payments are the cash paid upfront at the time of purchase, but why are they important? Down payments allow drivers to secure more agreeable interest rates or monthly payments by offsetting their overall loan balance.
The more you put down, the smaller the principal balance of the loan is, meaning you have less to pay off in the end.
How Much is a Down Payment?
Down payments vary depending on what you are purchasing. For vehicles, a typical down payment used to be around 20% of the vehicle’s value but that has decreased in recent years.
More realistically, a down payment made now can be anywhere from 10 to 14% of the vehicle’s purchasing price, but the more you pay upfront, the less you’ll have to pay back down the line.
Are Down Payments Necessary?
There are no solid rules requiring down payments, but most lenders nowadays require one. This goes for just about any borrower, no matter their credit or financial status.
The exact amount required to be put down at the time of purchase can be negotiated but buyers will most likely need to put some amount down at the time of purchase. It’s worth noting that is generally best to make as large of a down payment as you can afford, as this reduces the amount you’ll be borrowing.
For more information about financing your next Cadillac vehicle, be sure to reach out to the MotorWorld Cadillac finance department today! Arming yourself with the knowledge to tackle the entire financing process will help you navigate just about any dealership, so the sure to do some more research before your visit.
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