What kind of new car interest rates can I get with a substantial down payment?

I have no chargeoffs, and have never been late with any bills, rent, tuition, etc. I’m interested in purchasing a car to replace my gas-guzzling truck now that I’ve landed a great entry-level financial position, and I’m curious as to what to expect from my situation. The car I intend to purchase has an MSRP of $21,000, and I intend to put right around $9,000 down and pay the tax up front (TX 8.25%). I’ve calculated some payment estimates, but since my credit isn’t established, I’m wondering what type of rate I can expect to pay on my loan. I intend to finance the car for 60 months. With a substantial down payment of more than 40% of the car’s value, and net income of $25,000 a year, will I still have a difficult time getting reasonable financing with my young credit history?

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3 Responses to “What kind of new car interest rates can I get with a substantial down payment?”

  1. lcplcadaver said:

    Most credit rates for car loans are based on a credit score. I know most manufacturers have a recent college grad program. Best bet, go to a dealer and see what they say. If you qualify for zero %, then put the least amount down and bank the rest. Then pay the payment from what you would have put down.

  2. krasnomi said:

    Interest rates are not based on how much money you put down in the number range at which you are purchasing. Rates are based on your credit report – a problem if you have no established credit in that you will have a much higher rate (because the lender views you as a higher risk to default on the loan). Some car / truck companies are offering 0% interest rates, but again, those rates go to people with good, established credit. So yes, you’re going to have a tough time getting financing at a decent rate, and it’s to your benefit to put more money down because your high-interest loan amount, and your interest payments, will thus be lower. Try the online lenders such as e-loan for the best rates, but also work on establishing a good credit history (by making timely payments on your loans or credit card debts) so that you are in a better position for future purchases.

  3. cinderjo said:

    Most manufacturers have a first time buyer program. The best thing to do is go to the dealer fill out a credit ap and tell them you have maybe $4500 down. Minimum income for banks to finance is 1800 a month which you have and they also look at equity in the vehicle. I’m saying 4500 because if the bank says no, then you can say what if i come up with 9000? You can usually negotiate the interest rates too! Credit unions in your situations are sometimes good too!

    They may also want a cosigner.




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