If you’re looking at purchasing a new or pre-owned car in the Raleigh area, you may be wondering how large of a down payment on the car is necessary. While most lenders do require a down payment on a car, most will allow you to put down any amount you desire. A low car down payment shouldn’t prevent you from getting your preferred vehicle, but a larger down payment has the advantage of lowering the total amount owed and thus gets you a lower monthly payment. Learn more about down payments on cars in the guide below!
Lenders want the auto loans they approve in Cary and Apex to be as low-risk as possible for them. Part of lowering their risk is requiring at least some amount of down payment on a car. It shows the lender that the borrower is serious about the purchase and provides them with some upfront compensation.
The down payment you make on a car is like an upfront payment that encompasses a certain percentage of the total purchase price. The more you pay upfront in a down payment, the less you will owe moving forward.
The general recommendation for how much down payment to put on a car is at least 20% for new cars and at least 10% for used cars. However, a 2019 analysis conducted by Edmunds found that the average down payment on a car, for both new and used cars, was 11.7%.
What’s the bottom line when determining the down payment you will make? A larger down payment is always ideal, but car-buyers should take their unique budget into consideration. Choose an amount that you’re confident you can save up without stressing your other finances or dipping into emergency funds.
A low car down payment will be acceptable by most lenders’ standards, so don’t be worried if you’re unable to put down 20% or more. However, if time is on your side and you can spend a few more months saving for a larger down payment, there are quite a few advantages to consider:
Need help determining how much down payment on a car you should make? Contact us to speak with our friendly finance experts. Our team will take the time to get to know you and your budget, so we can make a good recommendation that’s tailored to you. Apply for pre-approval to get started today!
Are you searching for a family-oriented SUV that will allow you to spend more time cruising around Raleigh and less time—and money—at the gas station? If so, the 2022 Chevy Equinox deserves a second look. The new Equinox for sale at Hendrick Chevrolet Cary achieves an EPA-estimated fuel economy rating of 26 mpg city/31 mpg highway with…
The 2021 Chevy Tahoe interior provides up to 122.9 cubic feet of cargo space for Raleigh families on the go. But what if you max out the cargo hold on your next road trip? There’s no need to worry because the 2021 Chevy Tahoe towing capacity has your back! You can haul an impressive amount…
If you’re in the market for a compact SUV that’s agile and fun to drive in Raleigh, you’ve probably set your sights on the 2022 Chevy Trax. When you begin building your new SUV, what colors does the Chevy Trax come in? With nine available exterior shades, it’s easy to create an SUV that perfectly…