Down payment?

[brbmake]

Pros and cons of putting money down when buying car? Dh and I will be buying a used F150 in 6 weeks or so. We have about 10% of what we estimate we will spend to put down, but I'd rather not if it doesn't make a big difference. Our credit scores are in the high 700's. We are estimating we will spend around 26k. Thoughts?

[Anonymous]

Down payments can be more important on new cars due to how much they depreciate when you drive off the lot (and not needing to pay for extra gap insurance if you're underwater on the loan.)

For people with borderline credit, a significant down payment can mean the difference between an approval or a denial.  With your scores, I don't really think that is going to matter.

Having a lower payment (by putting more down) could be helpful if you find yourself in times of financial distress down the road (but better yet is an adequate emergency fund to cover your expenses in those times.)

If you have $15k, $20k, whatever in the bank, I might consider putting a few thousand down. If you don't, I would try to avoid it and keep your cash on hand. (Although, if I didn't I personally wouldn't be spending that much on a vehicle.)

[Anonymous]

The downpayment is the only thing that will keep you ahead of the depreciation curve. Trucks hold their value but depending on how you use it (long commutes, rough on body/interior), you can drastically increase the rate of depreciation. I deal with people everyday who did not put money down and are uoset when they realize car is a total and they are upside down. So, decide between larger down payment or GAP coverage IMO

[Anonymous]

What year is the truck? If the truck is a 14 or newer you should be able to secure a rate under 2.99 %for under 60 months with a 720 plus score. Keep the money in your bank. I’m a pinch you’ll have the cash reserves for 8 payments if you ever needed them. Or when you save more then send in a large sum with towards principal only in the memo section of the check. You’ll be at a good LTV since trucks book out well, so cash down won’t change rate much.