Suggestions for Down Payments to Put Down On Your Next Car

You’re standing in the new car lot, staring at what you think is your next car. This can be a scary time in a person’s life. How much money should you spend on this car? Should you look into car financing? Is car financing smart? Is car financing bad for your credit? These are all common and good questions to ask before signing the dotted line. The most important thing to worry about in this part of the car financing process is how much money you should put down.

Using a down payment when car financing is a great decision, but there are different estimates of how much you should put down.

Putting down ten percent of the car’s price will lower your interest rate, and if you put down more than ten percent, it will lower your interest rate even more. A car’s value will depreciate up to twenty percent in just the first year. So, if you put down twenty percent, you won’t owe more than the car is actually worth.

There really is no ideal down payment when you’re car financing. However, if you have enough money to use a lot of it on a down payment, then do it. This will lower your interest rate, save you from depreciation, and you’ll be a smarter car buyer in the end!