Just How Much Should a Car Down Payment Be?
When purchasing a new vehicle, there are a lot of financial decisions to consider besides picking out a suitable make or model that meets your needs and preferences. As a general rule, you should be ready to part with at least 20% of the vehicle’s sticker price upfront. Here are a few reasons why you should put down 20% on a car:
You don’t want to owe more than the car is worth
The value of a new vehicle depreciates by 20% within the first year. Failure to place a down payment or making less than a 20% down payment means you owe more than the vehicle is worth the instant you drive it off the lot. If you wreck your car and it’s totaled, the insurance company will only cover its value before the crash — which could be substantially less than the amount you owe on your loan.
You might attract a lower interest rate
Making a sizable down payment signals to financial institutions that you are a lower risk borrower. Lenders are likely to offer you a lower interest rate than they would if you had made a lower down payment. Better still, when working with a lender like Bragg Mutual FCU, you are more likely to secure an auto loan even with little to no credit history.
Lowers your monthly payments
Putting more money upfront means you’ll owe less in the subsequent months in addition to paying less in interest over the life of the loan. The solution to making car payments manageable is putting a sizable car down payment.
Bragg Mutual Federal Credit Union offers competitive auto loan solutions to meet your needs. To save for a down payment on your new car, consider a Share Save Account or a CD through Bragg Mutual. Our friendly staff members provide free financial consultations and can determine the best ways to reach your savings goals.
Trust one of the fastest-growing credit unions in North Carolina to save you money and make you money. Call Bragg Mutual Federal Credit Union at 910-222-1500 and let’s help you get the best vehicle finance today!
*Subject to credit approval. Rates disclosed reflect our best rates and may be different based on credit underwriting or services used. All loan rates are subject to change without prior notice. The information posted here is a service to our members. Although BMFCU strives for information accuracy, we do not guarantee or warrant information posted here.