What’s a Good Down Payment for a Car?

One of the questions you’ll want to ask when the time comes to finance a new vehicle is, “what’s a good down payment for a car?” The general guideline is 20 percent of the car’s sticker price – though this answer can vary based on factors like your credit score and whether you’re trading in. The finance experts at Sentry West Mazda offer these tips to help you decide what’s the right down payment for you.

Consider Your Credit Score

Before you decide on a down payment, you’ll want to check your credit score. Your credit score tells lenders how reliable you are to lend money to, and the higher your credit score, the more favorable your financing terms will be. If your credit score is lower, you may actually be required to put down a higher down payment, so you’re less of a risk of the lender. It can be useful to raise your credit score before you begin the financing process.

Consider Trading In

One of the best ways to reduce your down payment costs is by trading in your current vehicle. When you trade in, the value of the current model goes toward the next vehicle, and that means you don’t need to take as much time to save up. You’ll also save on sales tax, which is only calculated after trade-in vehicle value has been deducted, and that means even more cash for your down payment.

Use the 20/4/10 Rule

If you’re just not sure where to start when it comes to your vehicle budget, consider the 20/4/10 rule. It recommends putting down 20 percent of the vehicle value on the day of purchase. It also recommends paying the vehicle off within four years, and spending less than 10 percent of your monthly income on transportation costs.

Learn More About a MAZDA Down Payment in Shrewsbury, MA

No matter what your vehicle financing needs might be, you’ll find the support you deserve at Sentry West Mazda. We’re here to help, whether you’re financing your first car or trading in your current model. Contact us to get started!

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