How to Calculate A Down Payment On A Used Car

 
If you want to finance a used car, making a down payment is the best way to minimize the monthly payment, keep interest low, and get your car paid off quickly. Calculating the down payment for a used car is slightly different than a new car because you don't have to worry about depreciation as much. Here three main factors that go into calculating your down payment.

Credit Score


Your credit score is a big factor in the down payment. If you have a bad credit score, save up so that you can put down a bigger initial payment. The lower your score, the higher your interest rate will be, which means you'll end up paying more. Counteract this with a higher down payment.

Depreciation Rate


You should also consider the depreciation rate of the type of car you're buying. Cars depreciate the most in the first five years, so you skip a lot of that when you buy an older car, but you also risk paying more than the car is worth. Make sure you're putting down a big enough down payment to counteract the depreciation gaining interest will get you.

Budget


Also take into consideration how much you can afford to pay each month. A bigger down payment means smaller monthly payments, so if you have a small budget, save up as much as possible.
Come talk to our friendly finance experts at Shults Resale Center to learn more about how to calculate how much you should put down on your next used car. We have two convenient locations: Dunkirk, NY and Olean, NY for you to choose from. Schedule an appointment or just drop by. We will see you soon!
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