GeneralWhat percent down payment?
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GeneralWhat percent down payment?Posted:

Yolo
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What percent do you guys recommend putting down on a car? I'm thinking I might do 20% maybe even a little bit more just because I'm thinking I'll take out a pretty sizable loan. lol
#2. Posted:
Mayburrry
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Depends how much you want your payment to be, put more money down drops the total amount owed.
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Adam
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Shrug. All about your personal situation and how much you can afford / want to pay out monthly. Then you gotta worry about the interest of the amount that you're borrowing and so on. I put down the minimum and it seems to work out for me but that's the UK market doing UK market things
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r00t
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The minimum allowed by the lender.

If you want to pre-pay to reduce your finance cost because your interest rate is high, make payments above the minimum.
#5. Posted:
002
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I never do auto loans unless I can get the loan under the rate of inflation and I have the money in the bank to buy it outright.

As far as what % down, that depends on the situation. if it's your first auto loan (if you payed another one off before a year it's still considered your first) a lot of places won't give you a loan over $30k. If you have bad credit, you might have to put a lot down. My dad for example had to put 50% down.

You also don't want to be cash poor either, keep 3 months of living expenses in the bank (including your new car payment and insurance) for the just in case. You might break your leg, Covid might shut everything down again, you might have to put a new transmission in the car, etc. etc.

Also think of later in life too. To buy a house or sometimes rent a place your debt to income ratio is very important and they don't want to see someone making $2k a month and have a $500/mo car payment.




Short version: Put as much down as you can with still having 3 months of living expenses in the bank.
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My RAM is gonna cost around 50k and ima put down 10k deposit
#7. Posted:
Jacobsmith32
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If you do not want to overpay on the interest, it is better to start with more than 20. On the one hand, at the beginning, it seems like you pay less, but on the other hand, the financial institution will take more in the process of repaying the loan with a minimum starting interest rate. It is desirable to have a full picture with all the positives and negatives. The financial institution should provide such information upon request.
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Jacobsmith32 wrote If you do not want to overpay on the interest, it is better to start with more than 20. On the one hand, at the beginning, it seems like you pay less, but on the other hand, the financial institution will take more in the process of repaying the loan with a minimum starting interest rate. It is desirable to have a full picture with all the positives and negatives. The financial institution should provide such information upon request.


This isn't exactly true, What ever financial institution you are getting your loan through is a business providing you a service. They only have your best interest in mind in the sense that they want to make sure you pay them back, and even then they don't mind over stretching your budget because often times auto loans are front loaded meaning that you pay more in interest at the beginning than at the end. That way the bank gets their money quicker and if you default on the loan, well oops you're on the hook for most of the cars value or we take it back and sell it to someone else.
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