How Much of a Down Payment Should You Put on a Car?
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
How Much Should You Put Down on a Car?
Benefits of Making a Down Payment
Your Monthly Payments Will Likely Be Lower
You’ll Pay the Car Off Faster
You May Get a Lower Interest Rate
Disadvantages of Making a Down Payment
You May Be Cash-Poor
You May Not Get a Lower Rate
4 Tips to Save for a Down Payment on a Car
1. Start Saving Early
2. Cut Your Spending
3. Know How Much You Need
4. Sell Your Stuff
Alternatives to Making a Large Down Payment
1. Trade in Your Old Car
2. Take the Shortest Payment Term You Can Afford
3. Pay Your Car Off Early
The Takeaway
About the Author
Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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