Is a down payment required for a used car loan for taxi drivers?

Generally, taxi drivers are required to make a down payment when applying for a used car loan. Here is an overview:

• Financial institutions often stipulate a minimum down payment of around 15-20% of the total used car price for taxi drivers. Some financing institutions may require payments as high as 25-30% down to approve loans.
• Reasonable down payments reduce the overall loan amount, which equates to less default risk exposure for loan providers. This makes it more likely for taxi drivers with average creditworthiness to meet eligibility criteria.
• Providing higher down payments allows drivers to qualify for significantly lower interest rates over the loan tenure.
• Given their intensive use, financial institutions have particular stipulations for financing taxis. Mandating substantial down payments is one prudential norm to confirm a taxi driver's commitment to repayment.
• Taxis rack up mileage very fast and withstand more gruelling wear and tear. Default chances increase if maintenance expenses start exceeding the taxi owner's earnings. Sizeable down payments furnish a buffer for lenders against such risks of rapid asset value deterioration.

While 100% financing options may seem advertised at times, a reasonable down payment from the taxi driver remains instrumental for loan providers providing used vehicle loans to balance potential lending risks.