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You will hear the terms low Down Payment (DP) and low installment a lot when looking for a car to buy. Every dealer would say that people can buy a car cheaply, and prospective consumers would be attracted to such advertisement. However, which option is better? Low DP or low installment?
Both programs offer great benefits for those who want to buy a car on credit, especially if they have a limited budget. Nonetheless, choosing either option will result in some consequences.
In choosing between the two options, it all comes down to the financial condition of the buyers. If the buyers have a decent income yet don’t have enough cash to pay a high amount of DP, their only option is choosing the low installment option.
On the other hand, if the buyers’ income is not that high but they have quite a bit of cash in hand, it would be ideal for them to choose the option of high DP and low installment. Usually, the low monthly installment option is combined with long tenure.
The advantages and disadvantages of both options are related to loan interest, installment, and the momentum of obtaining a car. If someone were to pick the low DP option, they have to pay a high amount of installment every month. In addition, the total amount that they need to pay tends to be higher as the loan interest will also be higher as well. However, in regard to momentum, you can obtain a car faster as you don’t need to save for a long period of time.
Also read: Mo88i Offers Cashback for Car Sellers
In contrast, if someone were to choose to pay high DP, for example, 30-50% of the car’s price, then the installment wouldn’t be too high, provided that the tenor is not too long. The total amount that needs to be paid shouldn’t be too different from the value of the car being bought.
Therefore, you need to consider your financial condition when making a decision. In general, ideally, you want to pick the high DP program and shorten the installment tenor so the amount you need to pay won’t increase that much due to interest.
In addition, if you take a short tenor – for example, less than three years – the car’s condition will still be pretty good, and it won’t require much maintenance. The car’s depreciation is not too different from the purchase price. However, things cannot be generalized as every household has its own appropriate cash flow.
So how can we set the installment portion correctly? The most common perspective to maintaining a healthy cash flow is making sure that your total monthly installment does not exceed 30% of your income. If you have any other installments beside car installment, you need to make sure that the total of all those installments does not exceed the aforementioned percentage.
To be safe, you can look for used cars with affordable prices in mobil88. You can opt to come directly to mobil88’s showroom or use the mo88i platform.
mobil88 now manages its latest digital platform called mo88i. You can check mobil88’s stock of cars or sell used cars using mo88i, which can be accessed via the website or downloaded from Playstore and Appstore.
Furthermore, you don’t need to come to the showroom if you buy used cars in mobil88. You just need to access mobil88 e-store and pick the car that you want from the comfort of your home.
mobil88 currently implements the COD (Car On Delivery) program. For the test drive session, the car will be delivered directly to your home. The COD service allows you to view and check choose the car that you have picked from mo88i. You can even do a test drive #FromHome as our staff will deliver the car of your choice to your home without any additional cost.
You can discuss your desired car or details about the installment via live chat. In addition, you can have a consultation about choosing the right car and selecting the suitable payment method.