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Oct 4, 2024 · 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 · The exact amount of your down payment depends on a variety of factors, and it can affect your overall financing. A down payment of 20% on a new car or 10% on a used car is usually sufficient...
- 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.
Feb 21, 2024 · Typically, we recommend somewhere between 10-20% of the car’s value for a down payment. The more you can afford to put down, the better. However, we urge caution when putting together a down payment. While a larger down payment means a cheaper loan, we would urge you to not empty your savings to pay it.
Aug 26, 2021 · The general rule of thumb is to pay 20% of the car’s purchase price as a down payment. While most dealerships and car loan lenders don’t require a down payment, experts generally recommend the closer you can get to 20%, the better — but even 10% or less is better than nothing.
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.
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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...
