A lot of the time there is an option to finance the full value of the vehicle with $0 down. That being said a lot of Canadians are interested in putting down a little bit of money.
The main reasons someone would want to put a down payment even though they have an option of no down payment are:
- Less overall amount financed
- Lower monthly payments
- Can pay off a smaller auto loan quicker
Yes it’s true you can still low payments and have short terms without a down payment, but obviously the less you need to borrow the lower you can make your payments.
So how do I save for a down payment for a car loan???
There are a couple tricks that customers have told us over the years that have helped them save for that down payment:
Starting small is better than not starting
You can save $3 dollars a day (the cost of a specialty coffee) every day and in 6 months you will have $500 saved!
Keep the saving for a car loan down payment separate from other savings
A trap you can fall into is putting all of your savings in the same place and then spending money where you never intended. Imagine you’re putting away $30 a week for a vacation and $30 for a car loan… Well if that “perfect” trip ends up showing up before you decide to get a vehicle, you may end up emptying out your savings and kicking yourself later for doing it.
Pay your(self) savings first
This is one you’ve probably heard before, but that’s because it really works. If every week or month you are at the mercy of what’s left over at the end of the month for savings – then chances are, that if you’re like us, you’ll find a way to spend pretty well all of it.
If, on the other hand, you put away money as soon as you get paid – chances are you still might find away to spend all of your money, but you can feel great knowing that you put some money away into savings too!