HOW MUCH SHOULD YOUR DOWN PAYMENT BE?

 
For a long time, paying a 20% down payment for a new car was the golden rule, but this isn't realistic for every buyer, especially in the current climate. Cars are more expensive than ever, and most buyers' incomes haven't changed to match, so it's harder to make sizable down payments. So how much should you be putting down on your new or used car?

Our best advice is for you to pay what you can afford. Today, that means about an average of 12% of the vehicle's total cost, but if you can't afford 12%, don't sweat it. Payments only go down about $20 for every $1,000 you put down, so you won't save yourself that much in monthly payments. Many new cars have extremely low APRs, so you don't have to worry about paying off excessive interest rates. That being said, we recommend higher down payments since they save you money in the long run. 
Let's look at how much you should put down based on the price of a new Toyota Camry, which start just under $25,000. 

Old Rule of Thumb: 20%

$25,000 x 20% = $5,000

Lower Down Payment: 12%

$25,000 x 12% = $3,000
 
While these payments may seem like a large amount, it is important to put down money on your new car. The larger the down payment you have, the lower the APR and the smaller the amount you'll have to pay interest on.  Another tip: don't go broke making a down payment, but do your best to save up a decent amount. If you can't save up to a large amount, maybe you should look into leasing options where you can pay less up front for higher payments down the line.

If you're still not sure how much to put down or if buying or leasing a new car is the right choice for you, stop by any of our Shults Auto Group locations in Jamestown, Warren, Bradford, and more to talk to our friendly finance staff. We are more than happy to help you figure out what car, new or used, best suits your driving habits and desires and get you into that car. Come see us today. 

Make an Inquiry