Is zero downpayment worth it?

Is zero downpayment worth it?

Updated on June 15 2024

So, you are eyeing a gorgeous car and try the unit in the dealership? Problem is, you don't have enough cash to pay for it. That said, there is a thing called zero downpayment, and it's a pretty tempting proposition. This method has been used in other countries for some time now but, this is quite new for most Filipinos.

How does zero down payment work in the Philippine market? Below are some important things that you need to know if you are considering this payment scheme:

The hook:

Zero down payment means you can buy any vehicle without giving any initial payment. Not even a single peso!

Dealers usually offer this promo to people who cannot afford to pay spot cash or, an initial down payment.

You can take home the car that you always wanted once you get approve with the zero down payment scheme.

The catch:

Banks are a bit skeptical about this method. As such, they don’t encourage their customers to avail in this scheme.

Banks require good credit score to approve your application for a car loan when you avail the zero down payment method.

Banks require high monthly salary for customers who wish to get an automobile using this financing technique.

Buyer beware:

A 36-month duration of loan is usually given to buyers who wanted to get a zero down payment method.

Zero down payment usually comes with a higher interest rate compared to ordinary car loans in banks or credit unions.

It is easier to apply for a car loan in various lending companies than get approve with zero down payment in banks.

Only car dealerships offer this type of promo.

Now that you have read the advantages and disadvantages of availing a vehicle using zero down payment method, you are probably considering other alternatives. Of course, saving more money while getting your desired automobile is such a great idea, right?  That said, here are other financing options that you can look over in buying a car:

Pay in cash - This one is easier said than done, especially for average Joe. But there are great benefits in purchasing anything with spot cash. First, car dealers usually slash a huge chunk of amount in the total cost of the car, allowing you to pay less than the original price. Second, you don't have to think about paying monthly amortization for a long period of time. And third, it's easier to drive around without thinking of high interest rates from a zero down payment scheme. This only means more peace of mind and less stress in the long run.  As such, it is advisable to save money first so you can pay in cash.

Apply for a loan - Yes, it is true that car loans in the bank have an interest rate. But it is way lower than what is offered in the zero down payment promo. As such, it is still a good deal to avail their financing services. Just make sure to pay your debts from other entities and build a good credit score to have a higher chance of getting approved.

Get a used car - If it's really too much of a stretch to buy new, it's time to consider the second-hand market. Yes, it's time to swallow that pride and be practical about this. Contrary to what other people think about second hand vehicles, there are several benefits of purchasing one instead of choosing brand new automobiles. First, the cost is cheaper as cars depreciate the moment it rolls off the dealership lot. This makes preloved cars more appealing to buyers who wanted to get a nice vehicle in an affordable price. Second, used cars can be just as reliable as new cars. Just make sure to check the entire vehicle to see how everything works before paying for it. Most used cars are no longer under warranty, and even if it still is, it can be transferred to you. Either way, this allows you to make modifications and add accessories sooner than later.

If you think owning a used car is in the top priority in your list, go for a reliable car dealership like Automart.Ph. With us, you have a wide variety of great vehicles to choose from, perfect for your budget. From repossessed units to certified used, we can cater to your specific need.

We also have different branches all over the Philippines. Just come and visit any of our store locations and we will help you pick the one that suits you best. What are you waiting for? Call us today and say hello to your dream car!