Many many people go to the car dealership with no clear cut plan in mind and the down payment is another one of those areas where some thought needs to go into the process. This can be a killer to people even when they don’t know it’s happening to them.

Borrowing money is very expensive and going with no down payment puts the dealer in control to how they can fit you into the car that you want. Often individuals use the trade in or just let the dealer rewrite the loan application so that the entire amount will be covered. Unless you own the car you’re trading in outright the amount you pay for the privilege of using someone else money can be quite pricy since that remaining amount owed will be tacked on to your new loan.

It may be the excitement of getting this new car, or that the money seems invisible, but the fact is that you will be paying more if you don’t have a down payment. Even if you pay a little it’s better than paying nothing. A down payment can save you on the monthly payment, it may get you a lower interest rate and may even get you a better rate than the “no-money-down” deal.