How much money should you save for purchasing a new car?
When Nebraska motorists buy a new car or truck, they must decide how much money to save up for the down payment like anyone else in the country. Financing can pay for the majority of a vehicle's price, but you'll probably need to put down at least $2,000 to make a purchase. A larger upfront payment could provide several important benefits.
Minimum Down Payment For a New Car
If you have an excellent credit rating, you might qualify for an auto loan with no money down. However, you still need to pay the sales tax and various fees. Dealerships usually add registration, advertising, documentation and delivery charges to the bill as well. If you select a $25,000 vehicle, plan to spend around $2,200 on fees and taxes depending upon where you are located.
Estimating the Ideal Car Down Payment
Many drivers don't qualify for auto loans without paying a substantial portion of the price of the car in cash. Lenders expect larger amounts if you have a low or average credit score. When you start saving for a new vehicle, remember that a bigger down payment will benefit you in multiple ways:
- You’ll get lower monthly loan payments
- You might not need gap insurance
- And you will spend less money on interest
Consumer Reports encourages motorists to save up a minimum of 15 percent. On the other hand, Edmunds describes one-fifth as the "ideal" amount but also suggests putting 10 percent down and buying gap insurance as well. Keep in mind that you can treat the value of any trade-in vehicle as part of your initial payment.
Consider Leasing a Car Instead
If you want to drive a new auto without saving up much money, think about leasing it. Many leases have total upfront expenses ranging from $3,500 to $4,500. You may qualify to lease a car with no down payment and less than $1,000 in fees. A higher initial cost usually reduces the monthly expense but won't affect interest rates.
What to Do?
The right amount varies based on your income level, credit rating, car price, trade-in vehicle and other factors. It also depends on your personal financial goals. Sarpy County motorists can easily compare a variety of loan options at Honda Cars of Bellevue. Our eastern Nebraska dealership offers competitive rates and financing solutions that accommodate many different budgets.