How to calculate your Ideal Down Payment Amount?

If you make an impulsive decision of applying for an auto loan, you will end up damaging your credit score and your financial stability. Obtaining an auto loan is a process. You will have to research several financial alternatives available to you and devise a plan for making regular payments. Additionally, you will also have to make down payment.

Why make Down Payment?

The reasons for making down payment are as follows:

>> It reduces the total loan amount and lowers your loan burden;

>> It helps in improving your approval chances;

>> It manifests a stable financial situation to the lender; and

>> It helps bad credit borrowers in getting an auto loan.

What is the Ideal Down Payment Amount?

The more, the better!

When it comes to buying a car, it is better to make as much down payment as possible. But, it is not possible for everyone to make down payment of a substantial amount. So, here are a few factors that will help you decide the ideal amount for making down payment:

The Condition of your Credit

A credit report manifests your financial situation and credit worthiness to the lender. So, check your credit report in order to understand how your financial condition will be perceived by the lender. If your credit report includes missed payments, bankruptcy or repossession, you will be offered a higher interest rate. In such a situation, you may want to make down payment of a large amount to reduce the loan amount.

Your Income

A substantial income and a stable job are indicators of regular monthly payments. If a lender is not worried about receiving regular payments, he/she will not make down payment compulsory for you.

On the other hand, if you have just switched your job or you do not have a regular source of income, lender may demand a higher down payment amount from you.

Your Choice - New Car or Used Car?

The depreciation rate of a new car is very high. If you make down payment of an insignificant amount, you will face the situation of an upside down car loan. So, it is better to pay at least twenty percent of the total car price as down payment. If you are inclined to buy a used car, ten percent of the car's price is considered ideal for down payment.

A Trade-In

If your current car has positive equity, you can use it for a trade in. The dealer will deduct the value of your current car from the price of new car. It will help you in lowering the total price of the new car as well as the down payment amount.

Once you consider all the above-mentioned factors, you will be able to calculate an ideal down payment amount for buying a new car.

Although important, down payment is not compulsory for getting an auto loan. Rapid Car Loans will provide you with no down payment auto financing program and help you avoid the need of putting money down. Apply now for no obligation bad credit instant car loan quotes.

How much Down Payment is Ideal for Getting a Car Loan?

If you make an impulsive decision of applying for an auto loan, you will end up damaging your credit score and your financial stability. Obtaining an auto loan is a process. You will have to research several financial alternatives available to you and devise a plan for making regular payments. Additionally, you will also have to make down payment.

Why make Down Payment?

The reasons for making down payment are as follows:

>> It reduces the total loan amount and lowers your loan burden;

>> It helps in improving your approval chances;

>> It manifests a stable financial situation to the lender; and

>> It helps bad credit borrowers in getting an auto loan.

What is the Ideal Down Payment Amount?

The more, the better!

When it comes to buying a car, it is better to make as much down payment as possible. But, it is not possible for everyone to make down payment of a substantial amount. So, here are a few factors that will help you decide the ideal amount for making down payment:

The Condition of your Credit

A credit report manifests your financial situation and credit worthiness to the lender. So, check your credit report in order to understand how your financial condition will be perceived by the lender. If your credit report includes missed payments, bankruptcy or repossession, you will be offered a higher interest rate. In such a situation, you may want to make down payment of a large amount to reduce the loan amount.

Your Income

A substantial income and a stable job are indicators of regular monthly payments. If a lender is not worried about receiving regular payments, he/she will not make down payment compulsory for you.

On the other hand, if you have just switched your job or you do not have a regular source of income, lender may demand a higher down payment amount from you.

Your Choice - New Car or Used Car?

The depreciation rate of a new car is very high. If you make down payment of an insignificant amount, you will face the situation of an upside down car loan. So, it is better to pay at least twenty percent of the total car price as down payment. If you are inclined to buy a used car, ten percent of the car's price is considered ideal for down payment.

A Trade-In

If your current car has positive equity, you can use it for a trade in. The dealer will deduct the value of your current car from the price of new car. It will help you in lowering the total price of the new car as well as the down payment amount.

Once you consider all the above-mentioned factors, you will be able to calculate an ideal down payment amount for buying a new car.

The Story of an Expensive Car - No Stolen Records

You buy a new car that is worth thousands. You make a commitment of making regular payment towards the car loan. And, your car gets stolen. A nightmare! It is quite terrifying to know that someone stole your car. But, with this car, you won’t have to worry about theft. And, mind well guys, this is no worn-out, tattered used car. We are talking about Tesla model S – the car that aced the Consumer Reports owner satisfaction survey. It was also the 2013 Motor Trend Car of the Year.

Tesla Model S at Detroit Auto Show

 

Don’t think that there is no Tesla on the road to steal. The company sold 20,000 cars last year and just three were reported stolen. In total, just four cars have been stolen since the company started production in USA. Compare it to median theft rate for all cars which is 3.58 thefts per 1000 cars. And you have your answer.

So, what are reasons of Tesla being a thief’s nightmare?

• Cars are stolen for parts and Tesla’s parts are not very much in demand. This is because most Tesla owners can afford its parts.
• Tesla doesn’t have the usual key. It can be opened with Key Fob only. This makes it difficult for stealing. Even if a thief steals the car by hacking the company’s network, Tesla will be able to locate the car.
• Also, it is not practical for thieves to steal a car that runs on a battery. The charge may get over when the police are chasing them.

So, if you are worried about your car being safe in your unsafe locality, Tesla can be a nice alternative for you. Think about it.

Buying a car - new or old, car buyers are often worried about high interest rates. But, now you can rest assure. Lower rates can be yours. Simply apply with Rapid Car Loans. The company is a renowned name in the auto financing market.