Skip to main content

Estimate Your Down Payment from Your Credit Score

 

This post explains how your credit score affects the pricing of your car. 1) we consider the down payment you will most likely be required to pay based on your credit score. 2) we consider the interest rate you will pay and what effect it has on your monthly payment.

Credit score chart idea showing light blue an red in one circle showing up here with a white background it


Down Payment

Because almost everyone finances a new car, your credit score can limit the type of car you can get. With a large enough down payment, almost anyone can get financed for a new car. Below is a guide that will show you what kind of down payment is required to get financed for your dream car.

  • Below a 550 – you are going to have a hard time getting financed for a brand new car without a large down payment (20% or more).  However, there are websites that will help you finance a used car.  You may have luck financing a car with less of a down payment if you have a decent car payment history (you made your previous car payments on time). Most new car lenders will submit your applications to multiple lenders. It’s really difficult to say what they will eventually require. You’ll just have to go to the car dealership and see.
  • A credit score between 550 and 650 – you should not have a problem financing a new car if your recent credit history (last six months) is clean. A modest down payment may be required to show the lending institution you are serious about your car purchase. You will probably need to give the dealer a down payment of around 5% to 20% of the car purchase.
  • Between 650 and 700 – You will have no problem getting financed (assuming you have no delinquent marks in the past six months). You can most likely get a new car with a modest $500 down for almost any car.
  • People with credit scores above 700 will have no problem getting a new car, and may even qualify for 0% financing with little or nothing down. It really depends on the dealer and financing company they use. Not all dealers or financing companies offer 0% financing. Call around. The ball is in your court. https://www.lifeofcoding.com/

Interest Rate

Your credit score does not directly affect the final car price. However, the lower credit score you possess, the higher the interest rate (APR: Annual Percentage Rate) will be.  Below is a table giving you a ballpark figure the APR you can expect and what it means in monthly payment for a 36 month auto loan on $25,000 borrowed. You can also lower your monthly payment by extending the loan to 48, 60 or 72 months.

FICO scoreAPRMonthly Car Payment
720-8503.193%$729
690-7194.577%$745
660-6896.671%$768
620-65910.300%$810
590-61915.294%$870
500-58916.563%$886

Glossary

  • Invoice Price – the price the local dealer paid for a car.
  • Down Payment – the total amount of money required, usually in cash, at the closing of the vehicle sale.
  • Credit Score – Your FICO credit score is what most dealers will use to determine your credit worthiness.
  • APR – Annual Percentage Rate; is a rate that indicates the total cost of borrowing on a yearly basis. Higher number are worse.
Car Buying Tips

Comments

Popular posts from this blog

Understanding Retro Cars: A Guide to Retro-Styled Vehicles

Retro cars, also known as retro-styled vehicles, are automobiles that hark back to a previous era of automotive design and styling. These vehicles are designed to evoke the look and feel of classic automobiles from the past, while incorporating modern technology and advancements. The History of Retro Cars The trend of retro cars first emerged in the 1980s, when automakers started to produce vehicles that looked like classic automobiles from the 1950s and 1960s. The design trend was initially driven by a desire to tap into the nostalgia of baby boomers who had grown up during that era, and to provide a contrast to the sleek and aerodynamic designs of the time. One of the first retro cars to hit the market was the Chevrolet Camaro, which was introduced in 1982 and was designed to evoke the look of the original Camaro from the 1960s. This was soon followed by other vehicles, such as the Ford Thunderbird and the Plymouth Prowler, both of which were designed to resemble classic cars from th

What is the Most Desirable Old Car?

There are many factors that contribute to the desirability of an old car, including its history, rarity, and overall condition. However, some vehicles stand out as the most coveted among classic car enthusiasts and collectors. In this article, we will explore some of the most desirable old cars that are sought after by car enthusiasts and collectors around the world. Classic Cars from the 1950s and 1960s The 1950s and 1960s were a time of great change and innovation in the automotive industry, and many of the cars produced during this time are now considered to be classics. Vehicles such as the Chevrolet Bel Air, the Ford Thunderbird, and the Plymouth Fury are highly sought after by collectors due to their unique style and iconic design. These cars are often praised for their clean lines, elegant curves, and simple yet sophisticated style, making them timeless works of art that are still highly prized today. Muscle Cars from the 1960s and 1970s Muscle cars were high-performance vehicle

Honda Civic

The Honda Civic is a line of compact cars manufactured by Honda . It was introduced in 1972 and has gone through several generations , with the most recent being the tenth generation released in 2016 . The Civic has been a popular choice for those looking for a reliable , fuel - efficient and affordable car . The Honda Civic is also known for its excellent safety ratings , making it a great choice for drivers of all ages . The Honda Civic has been a popular choice for drivers around the world for decades. This comprehensive guide will provide you with all the information you need to know about the Honda Car, from its features and specifications to its safety ratings and more. Whether you're looking for a reliable, efficient car for your daily commute, or you're simply curious to know more about the Honda vehicle, this guide has you covered. In addition, you'll learn why the car is such a reliable and cap