Should I Put Zero Down on a Vehicle When Financing?

If you’re wondering if Dodge zero financing is a good idea, Helfman Dodge Chrysler Jeep® RAM FIAT is here to help. We work one-on-one with drivers to help you find the right car at the right price. Learn about how down payments work, and why it’s best to avoid a zero down payment when purchasing your next vehicle.

What is a Down Payment?

The down payment is the amount of money you give to the dealership the day you take your car home. The more money you are able to put down on the day of, the less you will have to pay over time, which means significant savings on interest payments. If you have a lower credit score, you may also be required to put down a higher down payment.

Should I Put Down Zero Dollars?

If you want to purchase a vehicle today and don’t have any money saved, you might be tempted to do a zero dollar down payment. The truth is, it’s typically not a good plan in the long run. When you put down zero dollars, you’re a higher risk for the lender, which means your interest rates will be much higher. You also run the higher risk of becoming upside down on your loan, meaning you own more than the vehicle’s value.

How Much Should I Put Down?

When setting a budget, it’s useful to calculate your down payment, so you know how much you’ll pay every month. A good rule of thumb is the 20/4/10 rule. It recommends putting down 20% of the vehicle’s value the day you take the car home. It also recommends paying the car off within four years and spending less than 10% of your monthly income on transportation costs.

Begin Dodge Financing in Houston, TX

Helfman Dodge Chrysler Jeep RAM FIAT makes the financing process smooth and easy. We provide tools and resources to help you along the journey, including payment calculators and online applications. Get started at our dealership.