In 2021, it was reported that the average price of a car in Canada was over $50,000. While car prices may be higher, that doesn’t mean you can’t find a great finance deal, so what’s the rule of thumb for a down payment on a car?
Many people get confused when deciding how much they should be spending on a car. Particularly with all of the different finance options available.
However, knowing what kind of down payment on a car you should make is important. If you don’t know how much you should be paying then you can end up spending a lot more than you need to.
So to learn how much a car down payment is, keep reading.
How Much Is a Down Payment on a Car?
The amount you have to pay for your down payment will depend on your loan provider. Although, there are guides to how much you should be putting down on your car when you are financing.
Typically, you should put down at least 20 percent on your car. This is a rough guideline for the average down payment on a car.
Because 20 percent is the recommended amount, most car services will expect you to pay this.
Also, if you put down less than this then your interest rates may go up. If your interest rates go up then it means you will be paying more overall. This may also cause your monthly payments to go up as well.
Car prices may vary so it’s always good to keep this in mind whenever it is time for you to purchase a car.
For example, if you buy a car for $50,000 you would have to put down $10000. However, if you buy a car for $100.000 you would have to put down $20000.
If you find yourself stuck trying to work out what’s a good down payment on a car, you can always ask your car dealer. A high-quality car dealer will always be happy to go through your payment options.
The Benefits of Making a Down Payment on a Car
Spending money on a down payment for your car can seem like it’s a lot of money going out at once. However, this is actually a good thing and it will benefit you in the long run.
Here are some of the benefits.
Reduces Monthly Payments
One big benefit to putting a lot of money down on your car payment is that it will reduce your overall bill. This can help you to bring down your monthly payments significantly.
After all, most of us have a lot of bills so the last thing we want to be worrying about is paying off a huge sum of money every month.
Another thing that a down payment helps with is reducing the overall interest rate that needs to be paid. This gives you much more flexibility when it comes to your payment options.
It also reduces the overall amount that you will need to pay as a lot of money can be added in interest. This is a benefit that you should consider when making your down payment.
You Will Pay Off Your Loan Quicker
Nobody likes to have a bill that never seems to go away, and this can happen when purchasing cars. So one of the top benefits of making a big down payment is that you can pay off your loan quicker.
It goes without saying that the bigger the down payment, the faster you will be able to pay it off. While most people would love to pay their car off at once this isn’t always possible, but a big down payment does help.
Where to Find a Good Car Service
Getting the right car service is all about knowing what you should look for in a car dealer. Unfortunately, not every single car provider will offer you a high-quality service.
Some of them do cut corners when it comes to their service and this is something that you should avoid. Instead, you should focus on using a car service that prides itself on creating the best customer service experience possible.
Here are a few signs of good service.
The first thing you should consider is their car prices. In particular, you should look at the interest rates that they offer on their cars.
Some services may seem like their prices are low however there can be hidden fees. So you should keep this in mind when deciding what service to use.
Another thing you should consider is the reputation of the service you are considering using. If a car service has a bad reputation then it may not have a great service.
On the other hand, if they have a good reputation then it is likely that they have a good service. You can check their reputation by word of mouth and looking at reviews.
Our Top Choice
While we can’t recommend every car service out there, we can recommend our service at Cars Fast. We aim to provide our customers with the highest quality experience possible when purchasing a car.
We appreciate that getting a car costs a lot of money, which is why we always put you first. If you would like to learn more about our services, you can view our finance options here.
Get Your Car Financed Today
Making a down payment on a car can feel like a stressful experience. However, at Cars Fast, we aim to keep our process simple so that you can get approved in a matter of minutes.
So if you would like to get your car financed today, then why not apply now.