Tag Archives: down payment

new vehicle

The New Average Monthly Car Payment is Now $700! How to Reduce This and Still Get a Great Car.

This entry was posted in Repo Cars and tagged , , , on by .

It’s the new reality: the average monthly new-car payment surpassed $700 in May 2022. As a result, many people have decided to wait on buying a new car until the market returns to normal. Unfortunately, this current market looks to be the new normal. Even though car prices are decreasing, interest rates are increasing, making car payments higher than average. 

The Federal Reserve continues to raise the federal funds rates, driving auto loan interest rates to a 20-year high. The average new-car transaction price, according to Cox Automotive, remains above $48,000. In October 2022, the average monthly new-car payment hit another high of $748 a month. Average used-car payments have surpassed $550 based on a 70-month loan term and 10 percent down. 

According to Edmunds, the average car loan APR for new cars is 6.3 percent, and for used cars it’s 9.6 percent. Even if you’re saving a bit on the cost of the car, your monthly car payments can still be out of reach because of the new interest rates. Unfortunately, experts predict that things will stay this way throughout most of 2023. 

So what if you are in the market for a new or used car, but you’re not in a position to pay $700 or more a month? Below are some tips to reduce the cost of your payment and still get a great vehicle. 

Determine What You Can Afford 

First off, determine what you are comfortable paying for a vehicle each month. If you know the average costs for a new car are around $700, and $550 for a used car, you can establish a realistic budget. But it’s also important to assess what you can actually afford

Many people can’t take on a car payment that’s over $500, so if this is the case for you, you’ll need to find creative ways to reduce your payments. For example, you can put more money down and shop for lower interest rates – which brings us to our next point. 

Compare Interest Rates from Different Lenders 

Even though dealership financing is convenient, you’ll also end up paying more for it. That’s because dealerships make money off financing. They might tell you that you qualify for a 9 percent interest rate, when in reality, you qualify for 7 percent and the extra 2 percent goes to the dealership. 

Businesses need to make money, but you also have the right to shop around for the best rates. Before you set out to buy a car, compare interest rates from different lenders. Many lenders offer prequalification, which gives you the rates without affecting your credit score. 

Don’t Be Afraid to Negotiate 

Speaking of leverage, don’t be afraid to negotiate, even in this market. Some inventories are healthy, so you may be able to negotiate a better deal or take advantage of special offers. But negotiations don’t stop there. 

When you shop for a repo car on RepoFinder.com, you can negotiate directly with the banks and lenders that are selling their inventory. They’re in the market to lend money – not sell vehicles – so they’re often open to working out a deal. And, you can get your financing directly from them! 

Consider Other Options Like Repo Cars 

Speaking of repo cars, don’t forget to consider other options like them. Repo cars have been taken from their owners for failure to pay, and they are sold at heavily discounted prices. You can also save money by looking for vehicles from private sellers in your area. Just be sure that you bring someone along for an inspection. 

Get the Most Out of Your Trade-In

Finally, if you have a car to trade-in, make the most of it. You can spend a small amount of money to clean the car, have the oil changed, etc. and get a higher offer on it. You can then use this money to put toward a down payment. Having a bigger down payment is an excellent way to bring down the cost of your payments. 

RepoFinder.com has a free list of repossessed vehicles that are available to the public. View them on our website, place a bid and schedule a time to inspect the car all from our platform. And it’s free! 

buying a used car

Can You Get a Car Without a Down Payment?

This entry was posted in Financing and tagged , , , , on by .

You desperately need to buy a car but you lack the cash to make a down payment. A dealership might tell you that’s no problem – and it might not be. For them. But for you, it could mean a very high monthly payment that you can’t afford. So what happens when you need a new car to get you to work or school but you don’t have the cash to put down? Believe it or not, you do have a few options. 

RepoFinder.com has a huge inventory of bank-owned vehicles ready for their next owners. These vehicles are priced attractively so that the banks can recoup some of their losses. If you’re shopping for a used car on a budget, this could be the best way to get the car you need at a price you can afford – and without a large down payment. 

How Important are Down Payments? 

Buying a car is one of the biggest purchases of your life. The size of your loan depends on how much you put down, as well as the interest rate and repayment terms. Ideally, you should try to cover at least 20 percent of the purchase price when making a down payment. This can come from a trade-in, the cash you put down or a mix between the two. 

Ultimately, there is no one-size-fits-all answer for how much of a down payment to make on a car. But the more you put down, the better. Here are a few reasons why: 

  • With a 20 percent down payment, you might get better loan terms or a lower interest rate 
  • When the car depreciates, a sizeable down payment prevents you from owing more on the car than it’s worth (this is called ‘upside down’)
  • Without a down payment, you’re rolling all title and registration fees into your financing, causing you to pay more over the life of your loan 

Even a Small Down Payment Makes a Difference 

If you can’t afford to put 20 percent down, even a small down payment can make a difference. Let’s say you purchase a car for $20,000 at a 5.13 percent interest rate. At 60 months with nothing down, your payments are $415 a month. By putting just $1,500 down, you can reduce your monthly payments to $387. 

What if you suddenly need a new car but don’t have any money saved up? Good news – you can trade in your vehicle and use its equity for the down payment. Of course, this only works if your car is paid off or worth more than what you owe on it. But even if your car is only worth a few thousand dollars, this is enough for a down payment. 

Shop for Cheap Used Cars on RepoFinder

It sounds attractive to buy a car with zero down, but it’s usually not the best decision. You’ll likely get saddled with higher monthly payments and end up owing more than your car is worth. If you’re still not having any luck, shop the affordably priced bank-owned vehicles on RepoFinder.com. There are motivated sellers looking to sell repossessed vehicles at a discount to the public. You can find great deals and a simple $1,000 down payment goes a long way!