Down payment

Do You Really Need a Down Payment for a New Car?

Your old, busted up car is no longer reliable. You’ve made unforgettable memories with it, but the thought of being stranded on the side of the road isn’t worth the nostalgia. It’s time to get a new car, but you haven’t been saving up for a down payment. The question you may be asking yourself right now is, “Do I absolutely need a down payment?” 


When you buy a new car, the main thing the dealership looks at is your credit score. If you have a good score, that’s when they start planning out all of your paperwork. The next step is figuring out the exact value of the car you’re interested in. But to determine your monthly payment, the sales person will ask you about a down payment. Have you been saving up some cash to put down? 


Although some places don’t require you to have a down payment, it’s highly encouraged or you could be hurting yourself in the long run. Your dealer wants to know that you’ll be able to keep up with the monthly payments, and your monthly bill will shrink the more you put down upfront. This is because when you place a down payment, you’re reducing the amount of money you have to borrow which also lowers your APR and saves you money in the long run.

We already established that the more you put down, the lower your monthly payment. That’s the immediate benefit and you’ll thank yourself when you’re a couple years into making payments. But another obstacle you could avoid with a substantial down payment is negative equity. This happens when you’re making large payments on a car that has dropped in value. In short, the large payments you’d be making wouldn’t even be worth what you’re getting back.  


The amount you put down is up to you. It doesn’t have to be as much as $2,000 or $7,000. Even a couple hundred bucks could help your case by a noticeable margin. In most cases, the dealership will let you trade in your current car as an acceptable down payment. 

At Prieto Automotive, we use trusted sites to gauge the value of your old car to see if it’s worth taking it off your hands. Even if the value for your car is acceptable, we also have to consider the cost of any repairs that might need to be done.  


We have financial experts at Prieto Automotive who can crunch the numbers and recommend a down payment amount that will set you at a monthly payment rate that fits your budget. Just call any of our stores and ask for assistance! 

So the literal answer to your question is no, you don’t always need a down payment. But you can avoid so much hassle by just putting down some cash up front. Wait a couple more months for that new car if you need to. It’ll be worth the wait to have a car that won’t stress out your bank account.

Down payment

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