Purchasing a new vehicle is a big decision. Being in a comfortable financial position that allows you to upgrade your vehicle is a great feeling. However, it is crucial to carefully consider all aspects of the purchasing process, including an appropriate amount of money to put down when taking out an auto loan. The financial experts at Community West Credit Union help members better understand down payments by discussing what’s a good amount, how they can impact auto loans, and more.
The Impact of a Down Payment
When it comes to buying a car, you have the option of paying the full amount in cash or financing the vehicle. When choosing to finance, you can opt to place a down payment to reduce the amount you need to finance.
The amount of money you choose to put down directly impacts your auto loan. The size of the down payment affects how much the monthly payments on the loan will be and the length of the loan. The more money that is put down, the less money will be required for financing your vehicle purchase.
The Benefits of Making a Larger Down Payment
When deciding whether or not to make a down payment and determining the amount, it is important to evaluate your financial situation. It is also important for you to understand the benefits a larger down payment can provide, such as:
- Decreased monthly payments: When you make a larger down payment, you can enjoy smaller monthly loan payments.
- Shorter loan terms: Choosing to place a higher initial payment will help decrease the amount of time you will be paying off the loan. A shorter loan term can be very desirable, as it means a shorter time spent paying off debt.
- Pay less interest: Since the vehicle loan terms are shorter with a larger down payment, you will pay less in interest over the life of the loan. You can take this money and put it to better use in a regular savings account
Apply for an Auto Loan at Community West Credit Union
For some, getting a vehicle loan can be a difficult process. Community West Credit Union looks to break that stigma by offering excellent car loan services. Our team of experienced lenders can help make the vehicle financing process simple. We work closely with you to ensure you receive the type of auto loan that works best for you. To help make certain our members are completely covered, we offer additional coverage options, including:
- Guaranteed asset protection (GAP) insurance: If you ever face a circumstance where your insurance settlement is lower than the loan balance, this coverage helps cover the difference, so you don’t have to pay that amount out of pocket.
- Mechanical repair coverage (MRC): This type of coverage helps ease the stresses of costly auto repairs for drivers.
- Debt protection: You can enjoy peace of mind knowing your car payment is taken care of should you experience an unexpected life event.
Those who are located in Comstock Park, Grandville, Hudsonville, Kentwood, Middleville, or Rockford, and are interested in learning more about our auto loan services can contact us.