benchi445

im looking to buy a used z for around $21500 before taxes title and registration.i was going to put $14000 down,but someone i worked with said that its not smart to put that much down and i should only put around $6000 down.is that really not a smart thing to put that much down?im still kinda young and i cant afford too much a month,i was hoping to pay 250-300 a month.

Cux350z

iTrader: (162)

look at it like this:

(your finance rate will vary with length of loan, and amount borrowed, these are just examples)

14k down, you still owe about 10k after financing,5 yr loan is about 170 a month.

6k down youd still owe about 18k after financing,5 yr loan is 300 a month. youll have 9k in your pocket which is good for 2.5 yrs of payments (or mods whichll most likely happen)

i would go the 2nd route, granted you might pay a few more bucks in the long run youll have cashflow if anything happens with your job(fired), car(wrecked), or insurance (tickets). and of course for mods.

hope that helped

toledo

I am not an insurance wiz but I would also research the insurance coverage you get for the car.

If your insurance coverage is only for market value (ie total loss only pays out what the car is worth) you will lose a good portion of you downpayment. So .. large downpayment ... get replacement coverage ????

Paul350Z

iTrader: (1)

Putting the extra money in the bank or on the loan depends on which pays more.

Compound interest works both for you and against you.

If you leave the money in the bank and draw 1-2% you're losing if you've got a typical 5-6% car loan. If you drop the money in your 401K and are making 25.86% and get a 1-2% loan you're making money by investing the extra cash so that it works harder for you.

I'm assuming that the money is extra money looking for an investment.

Paul350Z

iTrader: (1)

Get gap insurance - I think it was like $20-$40 for the life of my loan (12 months).

toledo

Isnt gap insurance only to cover the difference between the insurance payout and what you owe on a loan? This wont protect your downpayment will it?