How Much Down Payment Do You Need for a New Acura?
You’re crunching numbers, trying to figure out how much you can afford for your new Acura RDX, ILX, MDX, TLX, or perhaps even the RLX. Maybe you know that the monthly or bi-weekly payment isn’t going to be a problem. At the very least, you can make it work comfortably. But there are other factors too such as your car insurance and registration, not to mention fuel. But to buy your new Acura, you need to know one thing for sure: how much down payment is required?
What is a Down Payment?
If you’re securing a loan – any loan, not just for a car – you typically need to have a down payment. Its purpose is to lower the loan-to-value amount; that is, when you take out a loan, the value of the item should be higher than the loan amount.
A down payment does that. It’s money that you bring to the table when you’re buying your Acura. The down payment you make goes directly against the vehicle’s value, lowering the amount you have to borrow.
How Does It Help?
Two important things happen when you put money down on a vehicle purchase. The first is the most important for securing the loan on your Acura, and that’s to lower the loan-to-value amount. The second thing a down payment does is lower your payments. And who doesn’t want lower monthly commitments?
So How Much Down Payment Do You Need?
There’s no one answer that’s correct for everyone, and that’s because it depends on your own financial situation. Your credit rating, your current obligations, and your income are the biggest determining factors in the amount of money you need to put down.
There is a rule of thumb, though. If you’re looking to buy a car, a good idea is to have at least 10 percent of the loan value as a down payment. For some buyers, it may even be waived and you can finance the whole amount of the loan. For others, the down payment will need to be higher than 10 percent to make the loan affordable, or perhaps to be secure for the lender.
If you want to know how much down payment you need for your own Acura loan, we’re here for you. Submit a credit pre-approval to Jay Wolfe Acura to find out if you’re approved. Our financial managers will work hard to get you into the driver’s seat of the Acura model you love.