When someone says they are putting lets say $3,000 down on a car, are they putting money towards the car or something else. Or when commercials say "0 down."
2007-09-23 14:23:02 · 5 answers · asked by Silverenity 3 in Cars & Transportation ➔ Buying & Selling
When you buy a car, you can either pay for it using your own money (called "paying cash"), or you can finance it (that is, borrow the money from a bank/credit union/etc). Most people don't have enough money saved up to fully purchase a car, so they'll borrow some or all of the money.
For the people that borrow, the "down payment" (also called "money down") is the up-front money of their own that they put towards the car. So if I buy a car for $20,000 and put down $5000, that means I'll take out a loan for $15,000.
"Zero down" means you are not spending any of your own cash on the (initial) purchase of the car -- you are borrowing 100% of the money you're using to buy the car. So if I buy a car for $20,000, I take out a loan for $20,000.
The reason people put money down is because the less money you borrow, the less you'll pay in interest charges. Also, sometimes lenders will require a certain amount of money down in order to qualify for a better loan (lower interest rate).
2007-09-23 19:02:29 · answer #1 · answered by nevergonnaletyoudown 4 · 2⤊ 0⤋
A down payment is money toward the purchase price of the car. Often a dealer will require a downpayment before committing to a special order, or to get the customer's monthly payment below a certain amount.
In the case of a lease, it's often called a down payment, but it's really just a "pre-payment" on a portion of the lease. Again, the more you put down, the less your payments will be.
2007-09-23 14:29:41 · answer #2 · answered by Win S 4 · 1⤊ 0⤋
"putting money down" means paying for some of the car in cash. Then you get financing for the rest of the purchase price.
Zero Down just means no down payment needed. 100% of the purchase price is financed.
2007-09-23 14:27:32 · answer #3 · answered by mccoyblues 7 · 0⤊ 0⤋
Its usually money for a deposit on financing the car or house.
0 down usually means if you have approved credit, your deposit maybe waved on the purchase of a car/ house , etc .
2007-09-23 14:28:23 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Its just like a deposit.....If you are paying cash it will secure the deal / price for an agreed time period
2007-09-23 14:27:46 · answer #5 · answered by arikel 2 · 0⤊ 0⤋