Does my car down payment affect my finance options?

Question

I am saving up a large down payment on a pre-owned vehicle. Is there a minimum amount that you typically have to finance a car for in order to finance over certain lengths? For example, if I want to finance a car for 60 months, is there usually a minimum amount I have to finance for in order to get that finance length?

Answer 1

if you're going to FINANCE a car, it all depends on your credit rating. If you have anything over 720 Fico score, the world is yours -- you might be able to finance 100% of the vehicle's asking price.

If your credit is less than perfect, some Lien Holders will only back you for 85-90% of the actual vehicle value.

If the car's actual value is, for example, is $20,000 the bank will apply a loan value of $18,500 (based on 85%). You eat the remaining $1500.00 which you need to use as down.

Bottom line: It's your credit rating.

Answer 2

Some lenders, though very rarely, will limit the amount of down payment if the amount they are financing will not produce enough interest to cover the costs of managing the loan.

If you are looking at 50% or less, then you are fine: but the dealer can tell you if the lender will limit terms based on the total amount financed.

Answer 3

each dealer has a set amount they want for downpayments.... I just bought a 04 mustang gt and the ford dealer only wanted 200 bucks for downpayment. it helps the banks finance you the more you put down. but it does not really impact the monthly payments over 5 yrs.