- March 26, 2023
- Down Payment
- Posted by creativeauto
- Comments Off on Down Payment on a Buying a Car – Explained
When you buy a car, you have the option of making a down payment. The down payment is a sum of money that you give to the dealer upfront, towards the purchase price of the car. The amount of the down payment will affect your monthly payment, as well as the interest rate on your loan.
A larger down payment will lower your monthly payment, because you will be borrowing less money from the lender. For example, if you buy a car that costs $20,000 and you put down $5,000, you will only be borrowing $15,000. If you were to borrow the entire $20,000, your monthly payment would be higher.
A larger down payment will also lower your interest rate. Interest is the amount of money that you pay to the lender for borrowing the money to buy the car. The interest rate is determined by a number [...]
