How Much Should Your Used Vehicle Down Payment Be?
Shopping for a vehicle can be overwhelming, and many consumers don’t know where to start. Constructing a budget or financial plan is an excellent way of narrowing down the field of potential vehicles that would work for you. However, how much money should you be putting down on your used vehicle purchase? The staff at Autohouse Kingston is here to guide you, with helpful advice on budgeting for a down payment and why a down payment is important.
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How Much Should I Put Down On My Used Vehicle Purchase?
While a down payment isn’t legally required in the province of Ontario, it can certainly help put you ahead when financing a used vehicle. As an industry standard, the recommended minimum percentage to put down on a used vehicle is 10% of its total cost, however, putting down more money would be helpful. Anywhere between 10-20% would be appropriate, as long as it sets the driver up for financial success in making the monthly payments with ease.
How Does My Vehicle Down Payment Affect Me?
The down payment on your used vehicle can affect you in many ways, of course, it’s always better to put down more money than less. However, what are some of the negative consequences of not having a high down payment or no down payment at all? Lower down payments often have to deal with higher interest rates from lenders, if there’s no down payment at all and in the event your vehicle is totalled, you may be stuck with negative equity.
Factors That Offset a Low Down Payment
For drivers who struggle with making the minimum down payment but are set on the vehicle, there are a few other factors to consider that could help offset the lower down payment. A good or excellent credit score, a good income-to-debt ratio or previous auto loans that were paid with good standing are all factors that will pull in your favour.
Get in touch with our financing department for more information on down payments, interest rates and so much more. Start your used vehicle shopping experience on the right foot, contact Autohouse Kingston today and get ready to find your next dream vehicle by booking a test drive. We look forward to serving you.