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

newcarshopper: 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?

Answers and Views:

Answer by lcplcadaver
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.

Answer by krasnomi
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.

Answer by cinderjo
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.