Category Archives: myAutoloan

How Much Should My Car Down Payment Be

You know it’s time to buy a new car. Ol’ Bessie is sputtering at every turn and you’ve been saving up for what feels like a decade. But how do you know if you have enough cash saved up to buy a car? Most folks will say you should make a down payment that’s at least 20% of the vehicle purchase price, but you might be able to get away with a different amount. Learn more about car loan down payments and how to choose the amount that’s best for you.

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The Lowdown on Car Loan Down Payments

Unless you have enough cash on hand to pay for a car outright, you’ll need auto financing. Most people do! Financing helps you buy a vehicle and then pay for it over a period of time. Your down payment is the amount of cash you pay, upfront, to buy the vehicle.

Your down payment is an important part of the auto financing process, since it:

  • Reduces the amount of the loan you need to buy a car
  • Reduces the amount owed in case the lender has to repossess the car
  • Could increase your chances of being approved for a car loan
  • Could help you secure a lower interest rate and better terms for your loan
  • Can help lower your monthly payment and total amount paid
  • Provides you with equity in your vehicle
  • Could help you qualify for a more expensive, higher end car

What is a Good Down Payment?

Many experts advise putting down 20%, but this isn’t a hard and fast rule. The amount of money you put down will vary depending on a variety of factors, including:

  • Your credit profile: This is the most important factor in determining how much money you should put down for a car. If you have an exceptional credit history, you may be able to get away with a small down payment or find yourself eligible for one of the coveted “zero down payment” offers. If you have bad credit or no credit, you may be required to make a higher down payment.
  • The price of the vehicle: The pricier the car, the more you will usually need to put down. Then again, if you have an exceptional credit score, you may be able to go with a lower down payment. Your credit profile still reigns as one of the most important factors in determining your down payment amount.
  • Your desired monthly payment: The more money you put down, the less you will need to borrow. The less you borrow, the lower your monthly payments will be! Play around with myAutoloan’s Advanced Auto Loan Payment Calculator to see how your down payment plays into your monthly payment.

Run the numbers early on to give yourself a clear savings goal to work toward. To get an idea of what these numbers look like in real life, check out the table below. It offers a quick look at various vehicle prices, down payment amounts, and the resulting auto financing you’d need in order to purchase the vehicle.

Down Payment Quick Look Table
Vehicle Price Percent of Vehicle Price Down Payment Amount Amount Financed
$10,000 10% $1,000 $9,000
$15,000 10% $1,500 $13,500
$20,000 10% $2,000 $18,000
$25,000 10% $2,500 $22,500
$30,000 10% $3,000 $27,000
$10,000 20% $2,000 $8,000
$15,000 20% $3,000 $12,000
$20,000 20% $4,000 $$16,000
$25,000 20% $5,000 $20,000
$30,000 20% $6,000 $24,000

In the end, how much money you put down to buy a car is up to you. Down payment amounts will vary from driver to driver. Use myAutoloan loan calculators and interest rate estimators to get a better idea of where you stand. Then apply for an auto loan the fast and easy way! Submit one application and view up to four loan offers in minutes!

Does Shopping for Car Loans Hurt My Credit?

If you’re fearful that a car loan application will hurt your credit score, then this is the blog for you. Follow along as we explain how the top three credit reporting agencies typically roll multiple auto inquiries into one inquiry on a continuous, 14-30 day cycle, and why applying for a car loan typically won’t hurt your credit.

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Car Loan Shopping Doesn’t Hurt Credit

While shopping for credit can sometimes signal bad news bears to creditors (i.e higher risk), most credit scores aren’t drastically impacted by multiple inquiries from auto lenders within a short period of time.

The top three credit reporting agencies (TransUnion, Experian, and Equifax) understand that people are typically going to shop around when searching for the right auto, home, or student loan. After all, not all financing companies and loan offers are created equal! Shoppers may find varying interest rates and payment plans depending on where they go and when they apply. It’s all about finding the right loan offer for you and sometimes, it takes more than one loan offer to get there.

Lenders also know that you’re probably not trying to buy multiple homes or cars–you’re just trying to find the best rates and terms. Credit scoring systems have evolved over time to reflect this reality.

But You May See Multiple Inquiries on Your Credit Report

While your credit score isn’t likely to take a hit when applying for car loans, you may notice multiple inquiries on your credit report. Each time your credit report is reviewed by a different lender, an inquiry will appear showing who accessed the report and why. This is technically called an “inquiry,” though you may also hear “check” or “pull.”

Inquiries include information about who’s making the inquiry, what it’s for, the date it’s made, and the type of inquiry.

Experian, for one, will list each inquiry that is made in your file for two years, but these inquiries will only be counted as one inquiry when calculating your credit score.

That said, you want to apply for credit wisely. Don’t spread out your loan applications over a long period of time, as this will spread out the credit inquiries, too. As long as inquiries are made within about 14 days, they are counted as just one when your credit score is calculated. Space them out too much and you run the risk of having them be counted as separate inquiries.

And Certain Inquiries CAN Impact Your Credit Rating

A single hard credit inquiry typically won’t play a major role in whether or not you’re approved for financing. Lenders understand that most people compare loan options when buying something as big a house or car.

Still, it’s not a good idea to apply for a bunch of different credit cards and loans at one time. Multiple hard inquiries for different types of credit in a short period of time can signal to lenders that you’re in a financial pickle. They may assume you’re having trouble paying bills, getting ready to rack up debt, or that you’re short on cash—all signs that you could be a risky loan recipient.

Examples of hard inquiries include applications for a mortgage, auto loan, credit card, student loan, personal loan, or apartment rental credit checks.

The lesson? Only shop for one type of loan at a time and don’t drag out your financing applications over a long period of time. If your credit has been hurt in the past, work to build a healthier credit score by paying your bills on time, having a low balance on your credit card, maintaining a long credit history, and applying for new credit sparingly.

Go the Easy Route, with myAutoloan

myAutoloan is one of the fastest routes to smart auto financing. There’s no need to submit multiple applications in order to view multiple offers, and no need to navigate to different websites. Just submit one application and view up to four offers in a matter of minutes. Our applications are free, fast, and easy, and we’ll never pressure you to use one of our lenders’ offers or loans. Apply worry-free to buy the car you want. When you have nothing to lose, why wait?

Ideas on Getting the Best Used Car Finance Rates

Ways to Get the Best Used Car Finance Rates

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Getting financed for a used car can sometimes seem like an overwhelming and daunting task, but it doesn’t have to be. Finding the best used car finance rates can only occur when you take the time to research and understand the various advantages and disadvantages of different financing alternatives. There are a number of things to take into consideration when searching for financing solutions:

Credit Score

This is an important factor to take into consideration when searching for used car financing options. Many times, your credit rating will be the determining factor in whether or not you are approved for financing. Getting used car finance approval will likely be made difficult if your credit score is less than satisfactory, which means that you have had late payments, missed payments or underpayments on past credit cards or loans. Essentially, the financing agent will use the credit score to determine how likely you are to make payments on time based on your previous credit history. If approved, this may also determine how high your payments are and how long you are able to be financed. It’s not likely but It is also possible that you may be required to have a co-signer in order to be approved.

Income

Another vital consideration in used car financing options is your income. The financing provider will take into consideration what your monthly income is before determining a proper payment plan. The lower the car payments, the longer the period of financing will be. To get the best used car finance rate, try to stick with a car that you can have paid off within 12 to 18 months. Yes, that is not always possible but it’s worth the effort to see if this is something that you could make work for you. This will help to insure that you do not face additional or higher rates, yet the loan period is sufficient time to dramatically improve your credit rating. If you are required to have a co-signer to obtain used car financing, keep in mind that his or her income will likely be included in determining the finance rates.

Research

As you know, some car dealerships have their own financing agency on the lot, others go through an outside bank to finance the auto loan for their customers. Those that finance on the lot are often easier to obtain financing through because they focus more on income and less on credit scores, a valuable trait to the customer who has a blemished credit history. You might want to learn more about how this process works so it might be beneficial if you take time to review a Guide on Auto Financing. The key to finding the best financing rates is taking the time to search around before making a decision. Purchasing the first car that you qualify for is not always a good idea because it could leave you with higher rates than you would have faced if you had done a bit more researching before making a purchase.

Getting a good auto financing rate is challenging but not hard. Learn as much as you can and understand the process of auto finance. Make the effort and you will come out ahead when you move forward to buy and finance your next new or used auto loan. Good luck and good shopping!