How much money down is sufficent?
#1
How much money down is sufficent?
Hello, I am about to take delivery on my 09 fit what is a reasonable down payment. I have already put $500 to reserve my order which will go towards the car. Should I put alot more down? I already know the more the better but I am in college and would rather pay the higher monthly payment than put a large amount down. Basically my question is will they not want to finance me with only $500 down and my crappy trade in of a 2003 ford focus which is a total mess right now. I hope they give me anything for it.
#2
Why put anything down?
Chances are your credit cards have a much higher interest rate than the rate you can finance the car under. Save your cash for your credit cards or invest into something you can profit on. Invest into something that can help you in college! College can put you into ton of debt even with scholarships!
Very few have a ton of cash saved up or returned on investment justifying large deposits or outright cash purchase. Some are trying to qualify for a real estate purchase and additional loan might hurt them in that department. If they have a large sum of money that can cover real estate down payment and a left over for a cash car purchase then why not. Gaining a better interest rate on a house purchase will save more money and offset car purchase, in most cases anyway. It depends on real estate and vehicle value!
Even better is if people delay the car purchase and latter refinance their real estate purchase with a cash out. It is not like you are buying a GM or Ford with a charity rate of 0%! LOL!
Ivan
Chances are your credit cards have a much higher interest rate than the rate you can finance the car under. Save your cash for your credit cards or invest into something you can profit on. Invest into something that can help you in college! College can put you into ton of debt even with scholarships!
Very few have a ton of cash saved up or returned on investment justifying large deposits or outright cash purchase. Some are trying to qualify for a real estate purchase and additional loan might hurt them in that department. If they have a large sum of money that can cover real estate down payment and a left over for a cash car purchase then why not. Gaining a better interest rate on a house purchase will save more money and offset car purchase, in most cases anyway. It depends on real estate and vehicle value!
Even better is if people delay the car purchase and latter refinance their real estate purchase with a cash out. It is not like you are buying a GM or Ford with a charity rate of 0%! LOL!
Ivan
#3
I too am in college, with only about 1 year of perfect credit history. Honda approved me with 0 down, 60 mos @ 5.9% for my 08 Sport Auto.
I ended up putting $500 down anyway tho.
I really think it all depends on your credit history. I would say if you can afford to put more down, do it! But if you can't $500 is enough.
I ended up putting $500 down anyway tho.
I really think it all depends on your credit history. I would say if you can afford to put more down, do it! But if you can't $500 is enough.
#4
What you should do is pick a monthly budget you would like to keep. For example, you want to keep your monthly payment between $200 and $250 per month; go to an auto loan calculator--
such as this one:
Auto Loan and Car Finance Calculator
--and figure out what you need to put down to achieve your monthly payment goal.
such as this one:
Auto Loan and Car Finance Calculator
--and figure out what you need to put down to achieve your monthly payment goal.
#6
The way gas prices move and will no doubt go up again and demand for fuel efficient Honda's too, we can sell a Fit for what we paid for! You would not believe adds in my area! And people are actually buying! That is why I will sell my '07 for an '09.
Man, I can think of so many things I can put $5K in, but hey you must have your reasons too! It all depends on individual circumstances.
#7
On the purchase of my 07, I put what I needed to down to bring my monthly payment into the budget we planned. I had previously bought a truck, did not put down what I should have, and our monthly payments were a pain for the duration. In the end with the Fit, we were fortunate to receive a windfall and payed the car off early. On the 09 fit, I put down all of the money from the insurance and financed the rest. With the economy the way it is, I might have to change jobs, or cut back in the future and I do not want any outstanding debts.
#8
On the purchase of my 07, I put what I needed to down to bring my monthly payment into the budget we planned. I had previously bought a truck, did not put down what I should have, and our monthly payments were a pain for the duration. In the end with the Fit, we were fortunate to receive a windfall and payed the car off early. On the 09 fit, I put down all of the money from the insurance and financed the rest. With the economy the way it is, I might have to change jobs, or cut back in the future and I do not want any outstanding debts.
I strongly advise everybody to look into local credit unions! Just avoid really small ones! I switched from one to a much larger one. Larger one can give you much better terms than a smaller one. With that said, even really small ones will give you a better rate than a bank or through a dealer. Dealer actually has the right to "float" your rate couple of percentages at their discretion. At least that is what I was told when I sold Honda's in '92!
Once approved with the credit union request internet quotes from every dealer in your driving range and watch the show! Dealers wont advertise it, but they are linked to most major credit unions. They just push manufacturer's financial institution since they get incentives from them for doing so! Just do not give them any more personal info than required for a quote. Heck give them bogus address and phone number if you have to! I hate calls during diner time!
Internet quotes are normally at dealer invoice level or just above it. Nice thing is that you actually see where their breaking point is and averages.
Insist on availability info at the same time as well! Great price without a car in their possession means nothing!
Most dealerships treat internet sales as opportunity for additional sales and go for volume and not big profit.
When you settle on a price and car is available you walk in the dealership with power balance tilted in your favor where otherwise you feel like walking in naked and all the power is in dealership hands.
Do not be surprised if they ask your permission to try to beat your credit union rate and actually do it too! Just make sure you find out with what financial institution! Some will no doubt go under in next few weeks! Watchovia was the largest option arm seller for real estate. WaMu was the second one and look how they ended up!
Even if your car is currently financed with a bank or through Honda Financial, request quotes from credit unions for refinancing your loan. You will be surprised how better they can be!
Also get GAP insurance! It is a piece of mind! For some of you not knowing what GAP is, it is exactly what the name states. The moment you drive brand new car off the dealer lot car becomes a used vehicle and value drops by couple or few thousand dollars. Some insurance companies will pay up only that reduced, used car value if car is totaled on your ride home from the dealership leaving you to make up the difference to pay off the loan! GAP covers that difference and leaves you free and clear.!
BTW, if you attempted to get financing from multiple banks you will have multiple inquires on your credit history which will reduce your FICO score since you requested the offers! If you made all of them withing two weeks span, you can send letters to all three credit reporting agencies and request they be combined into a single inquiry and recover your FICO score! It is your right! Just do not expect them to do it on their own!
Also you are entitled to one free credit report per year! Pull it and check it! You will be surprised what can make on your credit report and might not even be yours! Identity theft and pure coincidence can really mess it up. Protect yourself by checking it at least once a year for free!
I apologize for a long post, but if it helps just one person it was well worth my time!
Ivan
#15
The best way is probably to go into your bank and ask if you qualify for a loan; and if so, at what rate?
You'll sit down with a banker and indicate how much you need to spend, how much you have down and how many months you are wanting to pay it in. I'm sure that they have this only, but I have only ever done it in person.
Zach
You'll sit down with a banker and indicate how much you need to spend, how much you have down and how many months you are wanting to pay it in. I'm sure that they have this only, but I have only ever done it in person.
Zach
#16
To my knowledge Honda Financial does not offer 72 month.
One big advantage of credit unions is also the ability to defer payments with ease while Honda Financial needs a proof of hardship making it much more difficult. I was out of a job for a while and decided to take advantage of the deferral. Patelco Credit Union did it over the phone without any questions asked. I had a choice of up to three consecutive months which is what I did. On my other car financed with Honda Financial I just gave up and kept paying!
Ivan
One big advantage of credit unions is also the ability to defer payments with ease while Honda Financial needs a proof of hardship making it much more difficult. I was out of a job for a while and decided to take advantage of the deferral. Patelco Credit Union did it over the phone without any questions asked. I had a choice of up to three consecutive months which is what I did. On my other car financed with Honda Financial I just gave up and kept paying!
Ivan
#17
I know this is an old thread, but Honda DOES do financing for upto 84 mos. My brother just financed a 09 Civic Si Sedan for 84 mos @ 9%
#18
As far as I know from the one I just financed and the previous one last year, 72 month is as long as AHFC goes for a FIT. Anyone out there that knows differently please correct me if I'm wrong. They may go 84 with more expensive models like the Accord, just a guess.
#20
I didn't read most of this, but Ciburri is the only one who has the right answer. Go join a credit union, get a 3% rate rather than 6% from Honda, and don't put anything down...it doesn't matter. You already understand what putting more or less down does for you, your only problem is not recognizing that honda is raping you. Credit Unions FTW.