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Oct 4, 2024 · Key Points. A down payment for a car in Canada is not mandatory, but it’s highly recommended. Some lenders may still require a down payment on a car, especially if you have poor credit. A down payment on a car is recommended to be at least 10% to 20%, which can help increase your chances of loan approval and reduce your monthly car payments.
Oct 13, 2022 · A down payment of 20% on a new car or 10% on a used car is usually sufficient, though your credit score can affect this. The size of your down payment largely depends on the value...
- Finance & Insurance Editor
- Lower interest rate. A substantial down payment signals to lenders that you’re committed to the car and therefore represent a lower-risk borrower, so some lenders will give you a better interest rate.
- Better chance of loan approval. If your credit score is less than excellent, a large down payment can help you qualify for financing. “Keep in mind that buyers don’t necessarily need all the money in cash.
- Lower monthly payments. More money down means less to pay each month, and less interest paid over the life of the loan. “If you can’t secure low financing for whatever reason, making a bigger down payment — or buying the car outright — can save you significant money in financing costs,” says Jason Allan, managing editor for Kelley Blue Book’s KBB.com.
- More equity. The more you put down, the more equity you’ll have. One reason for the 20% benchmark: It’s about what a new car loses in value through depreciation in a year.
Mar 29, 2024 · The 20/4/10 rule says you should put down at least 20%, and that you should choose an auto loan with a term of four years or less. Also, your total transportation costs (car payment, insurance, gas, etc.) shouldn’t eat more than 10% of your monthly income.
- Carol Pope
Nov 12, 2024 · How much should you put down on a car? A down payment between 10 to 20 percent of the vehicle price is the general recommendation. But if you can afford a larger down payment, you can...
Sep 9, 2024 · In general, you should put down as much as you can without depleting your savings account. Getting a car with zero money down is possible, but loans and leases typically require down payments. With more money down, your monthly payment is lower, and you’re closer to paying off the loan.
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Apr 20, 2023 · When you’re buying a car, one of the biggest decisions you need to make is how much money to put down. The down payment you make can have a significant impact on your monthly car payment, interest rate, and the overall cost of your loan.
