If you have bad credit, and don't want to get raped on the interest rate. Is there a certain amount you can put down to get financing at a good rate for a new or used car?
2007-02-19 11:53:51 · 7 answers · asked by Little Hulk 1 in Cars & Transportation ➔ Buying & Selling
10% would be good, but you'll still get raped on the interest, if you can wait your better off saving and buying the car when you can afford it. You could try to negotiate with the financier but i think no matter what you'll still have to pay a lot of interest.
2007-02-19 11:59:31 · answer #1 · answered by f_jayce 5 · 0⤊ 0⤋
What you put down won't help the credit problem one bit. If you are an honest reliable person, ask for a co-signer. And then get busy shopping. Look for big rebates. Call the dealers and speak with the finance mgr about these things. Just remember, once you are in the door to a dealership, don't let them corner you into buying something you will regret later. Don't reveal all your problems up front, let them know you are shopping. Every car manufacturer web site has a finance section that lists all the current incentives. That's what I did this year on my Impala. It had a $1500 rebate, plus I had another $2100 on my GM Card. I also put down an additional $2K. That's $5,600 down on a car that listed at $25,000. Not bad. You might also want to try a pre approval at your local bank. That will allow you to see just how much you can afford up front and you won't need a dealer to tell you anything you don't already know. Get smart about this, it's not hard.
2007-02-19 20:05:31 · answer #2 · answered by The Eagle Keeper 7 · 0⤊ 0⤋
The amount of money you put down on a car does not determine the interest rate. You will have a better chance at an approval with a significant amount of money down, but you will still get your slap on the hand for past credit issues...
Depending on what challenges there are to overcome on your credit profile and why it went "less than favorable" you can expect to get hit with a higher rate than someone with excellant credit. It is up to the lending institution to determine what that rate may be... the year, make & model of the vehicle also come into play as well as mileage...
If you are purchasing a new car (never titled) then the max rate is 18%... at least it is here in Louisiana. If it is a used car the max rate is 33%...
As for money down... which is what your question was you need to try to get to what is known as 75%to 80% of book. Or just under loan value... there are three values on vehicles... retail, trade and loan... a bank wants you tob e as close to loan value if not less than loan on the amount you finance... especially if you are a credit risk. That way if they have to repo, they m ay still get their money out of the deal by selling the car again. After all it is the bank taking the risk.. not you or the dealer... the bank is the one loaning money so they call the shots.
I.E. if you are looking at a car for $12,900 selling price and taxes are 7% ($903.00) and tags, registration & title $200 your total drive out is $14003.00 after t,t,l. Let's say the Retail value is $13500 and Trade in value is $12000 and Loan value is $10000 then you would need $5003 to put down to be at 75% of left book... which means 75% of trade = $9000 this is ideal for a lender because you are then just under loan and they would be more willing to tak a risk on you with a car loan. That equates to about 36% down on a car... traditional customers without credit issues can do it without any money down if they are PERFECT with credit and not overextended while the average consumer should have 20% down...
Hope all this car jargon and lingo helps...
2007-02-19 20:08:48 · answer #3 · answered by lastepmom 2 · 0⤊ 0⤋
i own a shop,and in that position the more you put down on it the better it looks on your behalf,it just helps bring the amount your going to finance down a little,and they might cut you a better interest rate,but if your credit is a little shaky ,then you can look out, if you don't put down at least ten percent of the total cost of the car,your going to pay a pretty high interest rate good luck i hope this help,s.
2007-02-19 20:00:44 · answer #4 · answered by dodge man 7 · 0⤊ 0⤋
Put down as much as you can. I was able, a few years after a bankruptcy, to put down $10k on a $25k car, and got a sort of reasonable rate - nothing good, but ok. After a couple of years, I refinanced it as a used car with my credit union and got about half the interest rate I was paying. Then I paid it off after about a year. It was paid off after 3 years instead of 5. I saved a lot of money without a lot of pain.
2007-02-19 20:08:56 · answer #5 · answered by mattzcoz 5 · 0⤊ 0⤋
Chinese Financing=1lumpsum, you can get a very descent car on ebay for 2k
2007-02-19 23:33:30 · answer #6 · answered by Anonymous · 0⤊ 0⤋
no but dont give it away what your puting down
2007-02-19 19:57:42 · answer #7 · answered by south418 2 · 0⤊ 0⤋