We meet customers all the time who come to our dealership asking "how much do I need down?" While it is certainly a valid question, it is always difficult to answer when it is the first thing a person says to you. It is probably a result of two things. Firstly, the economy has forced many people into situations where coming up with a large down payment for a car isn't possible. The second is the overwhelming number of advertisements from car dealers stressing a low down payment as the chief selling point.
Unfortunately, the whole low down payment scheme can be a big trap for used car buyers for a number
of reasons. Some used car dealers are able to offer low down payments with Buy Here Pay Here financing because they get vehicles cheap. Not cheap as in wow I got a great deal, but cheap as in you shouldn't buy it and no reputable finance company would touch it. Getting salvage, flood or branded titled vehicles is much cheaper for used car dealers than getting them with clean titles. Often the title status isn't disclosed to the buyer until papers are being signed or not at all. This practice is not only dishonest but is also illegal. Always, and we can't stress this enough, always ask if the vehicle you are purchasing has a clear title.
Another trap used car buyers fall into in the low down payment scheme is interest. Some dealers take advantage of the knowledge that a buyer is desperate to find transportation. The dealer will accept a low down payment on a vehicle. Yet after all is said and done, the buyer ends up paying over twice what the vehicle is worth because the dealer tacked on a ridiculous interest rate. As a buyer, you should always know exactly what your total payout will be for a vehicle.
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Unfortunately, the whole low down payment scheme can be a big trap for used car buyers for a number
of reasons. Some used car dealers are able to offer low down payments with Buy Here Pay Here financing because they get vehicles cheap. Not cheap as in wow I got a great deal, but cheap as in you shouldn't buy it and no reputable finance company would touch it. Getting salvage, flood or branded titled vehicles is much cheaper for used car dealers than getting them with clean titles. Often the title status isn't disclosed to the buyer until papers are being signed or not at all. This practice is not only dishonest but is also illegal. Always, and we can't stress this enough, always ask if the vehicle you are purchasing has a clear title.
Another trap used car buyers fall into in the low down payment scheme is interest. Some dealers take advantage of the knowledge that a buyer is desperate to find transportation. The dealer will accept a low down payment on a vehicle. Yet after all is said and done, the buyer ends up paying over twice what the vehicle is worth because the dealer tacked on a ridiculous interest rate. As a buyer, you should always know exactly what your total payout will be for a vehicle.
Sometimes what seems like a good deal is nothing but a "Low Down" dirty trap. But if you are vigilant and ask the right questions you can avoid being caught by it.
Have you ever been trapped into a bad deal on a used car? Tell us your story here.
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