A car isn’t universally considered as a basic human need, but it may as well be! Just like how smartphones have become an undeniable part of our lives, owning a vehicle is also crucial to saving time and effort.
The Best Thing About Owning a Car
Canada is a great country, but, unfortunately, not every place has excellent public transit. If you want to travel without stress, you’ll want to buy a vehicle. With a car of your own, you won’t have to depend on anyone—if you wish to go on long adventures, get to work on time, or have an emergency, you’ll have a reliable automobile to get you where you need to be.
Aside from the independence and freedom owning a car offers, you can also enjoy privacy and safety. With your safety in your own hands, you’ll have more control over how your drive will go. You may not be able to tell what other motorists are doing, but being a safe driver increases your chances of getting from Point A to Point B without problems.
An Obstacle to Car Ownership
Almost anyone in Canada would have a car if they wanted to. However, this isn’t possible, primarily because of the difficulties of financing. Cars cost a pretty penny—on top of the potentially stressful purchasing process, it’s also challenging to determine the size of the payments one can comfortably afford.
Auto financing options do ease the financial burden, but you’ll still be left with the down payment. Depending on your financial situation, it could significantly affect your financial stability and security and make monthly payments much more challenging to pay for.
So, how much should you pay for it? Is 20% still the recommended amount to use as a downpayment these days?
The Right Amount for Your Down Payment
In the past, 20% was a reasonable price to use as a downpayment for a vehicle, but some say it may be an overkill amount. With customers only putting on an average of 11.7% as a downpayment, it seems that you don’t have to follow the old school of thought.
As car prices in Canada keep increasing, it’s become more reasonable to seek auto financing options that won’t burn a hole through your wallet. Making a 20% downpayment doesn’t seem to be a viable choice because you could struggle to make monthly payments while also funding your everyday life.
Is It Alright to Make a Smaller Down Payment?
If you can’t afford to make a sizeable down payment, you could instead opt for a minimum down payment. If you have a pretty good credit score, a lesser down payment won’t affect your interest rate as much as you expect.
To determine the right car financing option for you, use a loan calculator. With a loan calculator, you’ll be able to change the terms of a loan and see what your monthly payments would be.
On the other hand, if you have bad credit, don’t worry—you can still get approved for auto financing. Since lenders see you as a high-risk borrower, mitigate their risk levels by asking for a smaller loan and making a down payment.
Personal vehicles are becoming more of a necessity, but unfortunately, looking for the best vehicle financing option is still as challenging as ever. Luckily, you can make a reasonably priced down payment for your car without struggling to make monthly payments with our guide. As long as you work with an expert loan specialist, you’ll be able to own a vehicle while still being financially stable!
If you need help with car financing, our team at Get Approved Canada has your back! Here at Get Approved Canada, we are your Canadian loan specialists from coast to coast. We work with all credit types to get you the lowest interest rates and the best payment options. Apply online today!