When you buy a car at the Glockner Family of Dealerships, you'll need to finance your purchase with an auto loan unless you're paying the cash price in full. You may think you're saving money if you put no money down and turn the entire price into monthly installments. But making a down payment offers many benefits.

Easier Loan Approvals

If you have a low credit score, lenders may be reluctant to approve your loan because you have nothing to lose if you decide not to meet your financial obligations. By making a down payment, you add your own money to the mix. Lenders will think that you won't walk away from your own money and may be more likely to give you a loan.

Keep in mind that loan approvals are generally not an issue at the Glockner Family of Dealerships. We're not in the business of making money off loans like a traditional lender. We're in the business of selling you cars and building a long-term relationship with customers who come back for servicing and to buy their next vehicle from us.

With our goal of 100 percent credit approval for all customers, we will create a loan for you even if it involves rebuilding your credit. We consider ourselves a "Buy Here, Pay Here" dealership that takes care of all your auto needs from financing to scheduled maintenance.

Lower Monthly Payments

The most obvious benefit of a down payment is the lower monthly installments because you're financing a lower loan amount. Assume you're financing a $30,000 loan for 60 months at an Annual Percentage Rate of 4.25 percent.

·         With no down payment, your monthly installment runs $556.

·         With a down payment of $3,000, you're financing only $27,000, which equals a monthly installment of $500. You're saving $56, which adds up to $3,360 over the life of the loan. That total means your saving more than the money you put down.

You can calculate the effect of a down payment on your installments using our convenient Car Loan Calculator.

Less Interest

Interest is what you pay for the use of the money. It garners profit for the lender but gives you no financial benefit, so you want to pay as low an amount of interest as possible. For the same reasons that your monthly payments will be lower, your interest charges will be less with a down payment. In addition, your interest rate may be lower because the amount that you borrow measured against the value of the car (the loan-to-value ratio) affects your rate.

Depreciation Offset

When you drive a new car off the lot, it depreciates immediately. Such vehicles typically use from 20 to 25 percent of their value after the first year. If you're financing extended warranties, accessories, registration, and taxes, and you put no money down, you may owe more than what the vehicle is worth after it depreciates.

Your auto loan then becomes "upside down" or "underwater" and you have "negative equity." If you need to sell the car or trade it in, the money you receive will not be enough to offset the remaining loan.

Making a large down payment offsets can offset depreciation, making the car worth more than what you owe on the loan.

How Much Should You Put Down?

Financial experts usually recommend that you put down 20 percent when you buy a vehicle. However, according to Edmunds, the average down payment is closer to 12 percent. One reason for the lower amount is that although vehicle prices have gone up, salaries have not. Consumers simply can't afford the larger down payment. In addition, today's relatively lower interest rate means that even with a lower down payment, monthly installments do not go as high. This allows consumers to save money on the initial outlay and the monthly payment.

Your Next Step

If you have any questions, feel free to give the Glockner Family of Dealerships a call and talk to a member of our finance team. You can also send us messages via our convenient chatbox. Consider getting pre-approved for a loan by filling out our Online Credit Application. You'll then know in advance what you can afford and can look for vehicles in your price range.


  • Monday 9:00am - 6:00pm
  • Tuesday 9:00am - 6:00pm
  • Wednesday 9:00am - 6:00pm
  • Thursday 9:00am - 6:00pm
  • Friday 9:00am - 6:00pm
  • Saturday 9:00am - 5:00pm
  • Sunday Closed