Cons Associated With No Down Payment Auto Finance

Time and again, a number of lending experts have voiced the fact that it is very crucial that every auto finance applicant should provide a good amount as down payment in order to save a lot of troubles that come with not providing the down payment. Very few people adhere to this thinking and the number of people is reducing considering the fact that a lot more companies are ready to provide auto finance without demanding any down payment. The following lines provide some disadvantages that are usually encountered when down payment is not provided.

The first disadvantage is that the financed amount is going to be large in any case due to the fact that in addition to price of the car, the maintenance and service or insurance charges are also added. Due to this, the borrower can feel the heat of the high installment at the time of the amount financed. Moreover, the down payment also somewhat affects the interest rate because that auto finance isn’t that much of a risk to the lender. Another disadvantage is that the interest charged is going to be more because the down payment used to bring down the amount which had to be charged with the interest rate for the borrower in the long run.

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