Question

We need to purchase a bigger vehicle with 4 wheel drive before next winter. It’s unrealistic for us to pay for it cash, so what’s a good, realistic goal for a down payment? 20% like what they recommend for a home? We will trade in our current car that is paid off, but it has over 200k miles so I doubt we get more than $500 for it.  

Answer 1

Try selling your vehicle out right & I say just as much as you can. I’m shooting for 10% down payment.  

Answer 2

How much is the car you are looking at? I think you need to decide a couple of things. Does it need to be brand new? Could you purchase slightly used from somewhere like car max? What monthly payment can you afford? How long do you want to have this loan for? We put 15k down on our first car (ended up just paying it all off) and our payment was just under 400$ a month. The car was around 37k. This was a 5 year loan.  

Comments

@kwon31833 we are looking at a car that’s about 20k brand new. I’m not sure if we will purchase new or not. The perk to buying new is we qualify for a 0% interest loan for the life of the loan. They only do that with new cars, though, so if we buy used we would have to pay interest.  

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@mosqueda ok, you also need to factor in taxes and such. Our car was actually around 32k but once taxes were added in, it was about 5k more. If you look up car loan calculator, you could play around with the cost of the car, the amount you can realistically put down, and what your payment will be. I think that’s the best way to go about it

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@mosqueda  I’d add a couple thousand more to the price you think it is, just to be safe
https://www.carloancalculator.me

Answer 3

Shop dealerships. The one we bought gives a minimum of $2000 whether you drive it in or tow it in. So for us, my husbands family owns a body shop. we took in a totaled car and got $2000 for it! You can definitely get more for your car than $500!  

Comments

This! I was going to recommend searching for one of these promotions or holding out until one comes up. The downpayment for a car I typically base on what I want my monthly payments to be no set percentage

Answer 4

I’d try selling your car privately since you’ll most likely get more money that way. Honestly, however much you put down is really going to depend on how much the car is and how long you want to be paying it. I’d just start saving any extra money to put towards a new car. The more money, the better!  

Comments

I’d also avoid buying brand new. You’re paying a couple thousand more for brand new vs a car a year or two older with a few miles on it.  

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@vaporizer I only buy new Interest rates are lower on new cars You aren’t buying someone else’s problem

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@ahoy98 certified pre owned is what I’ve done for all 3 cars I have. I saw the history of the car (no issues) and I can’t imagine getting a lower rate than our 3. 5%. Buying brand new is pretty much just wasting money for the title of “brand new”. If it works for you, great! It’s just not something I’d advise others to do.  

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@ahoy98 same. I’ve done zero down and 0% on my cars because they are new and I always get better rebates. Plus it’s new I’m not looking to take on the problems someone else had turning it in.  

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@appropriation we got a better interest rate on our brand new Kia than we would have a 2011 Camry. When we buy a truck in a year or two, we’ll probably go new again and get that 0%interest rate and then pay off a chunk of the loan

Answer 5

Look up your cars value on KBB. Know its true value and don't get pressured into a lowball trade in. And don't finance a car for more than 36 months

Answer 6

Look into Nissan (if you like that brand); I know they offer 0% loans if you go thru Nissan Finance depending on credit.  

Answer 7

We always go with at least 3k no matter what we are going to buy. Most of the time we’ve lucked out w nothing down but we have it if needed. We try to buy in sept and dec to get the best deals (and their trying to make sales to finish out quarter / new models for next year are out and pushing the old new cars lol). Idk what your looking at but if you don’t require 3rd row I have a GMC Terrain it’s amazing you can get awd and there’s a ton of leg room and trunk room.  

Answer 8

I would figure out what you’re budget is for payment monthly and what kind of car and how much you need. I put 10k down on mine, but it was 50k so I still financed 40k - which gives me $840 monthly payment

Answer 9

Check with carmax if there’s one in your area. We sold 2 cars to them before moving overseas. It was super easy and the price was much higher on one than I anticipated! We didn’t buy through them, just sold to them.  

Answer 10

Adding in to make sure you get the features you need and not just the ones you want. Like do you need 4wd or will awd suffice ? With kids and pets leather or a good scotch guard with warranty is well worth it

Comments

@console Baldwin we are moving up into the mountains so definitely need 4WD. The car we are looking at purchasing has all the features we need and is about $20k brand new.  

Answer 11

The more you put down the lower your payment and lower the term you have to get. Some car companies only offer 0% on 36 month loans. Personally we put 16% down in July on our car and we are about 1, 000 underwater right now. I wish we would have planned ahead more and saved more. In the future I would probably aim to have 30-50% off to ensure lower payment, and you can be more flexible with the term to get the best financing offer. The more money in your pocket the more control you have during the process.  

Answer 12

Thanks for your help everyone! I appreciate it!