Here is some good advice for car buyers about how much money to put down.
Are in the market for a used car or truck? If you are, you’re probably wondering about the smartest way to pay for it. How to finance a vehicle is one of the questions we hear most often from our customers.
There are four main factors considered in an auto finance credit decision: your personal credit history, your application information, the vehicle you’re considering (its age, mileage, and price), and your down payment. In this article, we’ll help you understand the importance of a down payment.
What is a down payment?
“A down payment will reduce the amount you borrow when making a purchase, and it could also lower your annual percentage rate and monthly payment.”
A down payment is the amount of cash or trade equity you pay up front when you finance a vehicle. The amount of money you put down affects the amount of your monthly payment. It could also help improve your financing offer, which could include a lower annual percentage rate.
How much should you put down?
Del Toro auto sales customers often ask us about the average down payment on a car or truck. The short answer: the more you can comfortably put down, the better! Making even a small down payment — even $500 — is better than making no down payment.
Putting down any amount as a down payment can improve your financing offer.
Your down payment will reduce the amount you borrow, and your down payment amount could also lower your annual percentage rate and monthly payment.
Banks like to see commitment towards the vehicle purchase so the more Down payment you have more money you will save in the long run.
Del Toro auto sales offers its customers fair pricing in our vehicle, which means we don’t negotiate any part of the transaction with you. The money you put down goes directly toward lowering the amount you finance. No haggling, no games. We always make it super easy, you can see our google customer reviews and read some of our customers experience with Del Toro auto sales.
If you’re not sure how much you can afford to put down, you can talk to one of out finance specialist and they will figured out for you the best posible scenario, plus other variables so you can estimate a vehicle finance budget that makes the most sense for you.
Use your vehicle’s appraised value or other sources for your down payment
Some customers don’t know they can use the equity they have in their current car or truck as part of their down payment, and they don’t consider this when they’re budgeting for their next vehicle. In addition to putting cash down, you could add the trade-in value of the car you drive now — that is, if you’re ready to sell it. Learn how to get your car or truck appraised here. You can also use your tax refund as a way to make a down payment.
Don’t get upside down
The larger your down payment, the less likely you’ll be “upside down” — this can happen when you owe more on your car than its value at the time of sale or trade-in. This is also known as negative equity.
Del toro auto sales in Auburn can help
If you don’t have the funds for a down payment at the time of purchase, don’t be discouraged about buying a used car. At Del Toro auto sales we work with a number of different finance sources that can provide a variety of financing options. Wether you have good credit, bad creditor no credit at all we can help you get financed. Obviously the more down payment you have the better, specially is you have challenging credit.
Want to learn more about financing with Del toro auto sales in Auburn for your next used car or truck? Contact us on our website or by phone calling 888-324-2978.