financing a used car.....where to begin?

Question

Hypothetically, if I wanted to finance a 2002 Honda Accord, and have perfect credit. How much of a down payment will I have to pay? and what would be your estimate of monthly payments?

Im not asking specifically for this car, I just want a outline of what i should expect of myself by the end of next summer, when I would like to finance a used car.

Answer 1

If you have a perfect credit, you won't need to put anything down on the car. However, it is advised to at the very least put the taxes and tag fees so you don't owe too much more then what the car is worth. A good rule of thumb for a 60 month payment would be roughly $20 per $1000 financed. Also, check with local banks and credit union about what interest rates they have and tell the dealership that. They will likely lower their interest to beat your banks rate. See, in car finance, they can "mark up" interest rate up to a certain point. Like the dealership can actually maybe get you a 5.49% rate but they sell it to you at 6.49% and get some money from the extra interest you will pay. If you are buying a used car, try to buy one from a franchise dealership and make sure it is certified. Usually certified cars come with a good warranty and a lot of times special financing rates, which will make your payments lower and save you tons of money in the long run. Trust me, I was a finance manager at a Honda dealership for many years, and they will try to make as much money as they can. Shop around for your car and your financing. You need to be very educated on your purchase to make sure you don't get screwed.

Answer 2

Theoretically, with perfect credit, you could get the car with no down payment. That is saying you have perfect credit though. Without perfect credit and just good credit and about a $17,000 car you should have about $3,000 to $4,000 to put down.

There is also, "would you really want to do that?" You would obviously be financing more money and would be paying more in the long run if you didn't put anything down, which is why a credit company would be willing to do this since with that type of credit history they figure you will make all of your payments.

Lastly, obviously keep an eye in the interest rate being charged and the length of the agreement. If they lock you into a 60 or 72 month deal you will be paying less monthly(which may be good for you, I don't know) but you will be paying more in the long run.

Answer 3

The more money you put down, the less you will have on the balance and the less you will pay overtime for interest fees. I always pay cash for my cars so I'm just guessing, but I would say 15% to 25% would be great and keep your payments decent. You also want to do some research and look around at different places so that you are finding your car at the cheapest price. Since you are asking this, I am also guessing that you are new to buying cars, so make sure you have a mechanic look at the car you like. Most used cars don't come with a warranty or come with a very limited warranty. You don't want to buy a bad car. Some states have lemon laws to protect you, but there is a limit as to how much money you can get back if you get sold a lemon. You also want to look at the mileage that is on the car and get a carfax report so that you can be sure the car hasn't been wrecked before and has a bunch of damage that you are not aware of.

Listed below is the link for Kelley Blue Book. Save it to your favorites so you have it later. This site will tell you what price you should be paying for your car. The dealers use it, but can price the car higher so they make a bigger profit.

Answer 4

i have a score of 714 which is GOOD, but not EXELENT and i have a Honda Accord 2002 EX with leather interior and at an APR of 7.9% i am paying 225.75 per month, but how much you pay will be dominated by how much you can get the car for and what percentage rate the bank that finances your car gives you.

Answer 5

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Answer 6

You'll need about 25% of the car's cost as a downpayment unless you are willing to pay a higher interest rate,

Answer 7

a bank?