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Used cars are a smart purchase, as you can get an excellent vehicle for the fraction of the price of a new one. Before test driving your new wheels, plan for how much you’re going to put down on the loan. This will help you save up for the down payment, and for incorporating a manageable monthly payment into your budget.

Financial Guide to Purchasing Used Cars

How Much to Put Down

Lenders often require 20 percent down on a new car to offset the initial depreciation, but this likely won’t be required for a used car since they don’t depreciate at the same speed. Generally, you should put down at least 10 percent of the total car’s value for your used vehicle loan. This means that if you buy a $12,000 car, then you should pay at least $1,200 up front. Keep in mind that the more you put down, the smaller your monthly payment will be and the less interest will be owed on the loan.

How to Calculate a Manageable Monthly Payment

used carsYou’ll want to keep in mind how much you can afford each month for the loan payment. This will help you determine whether you need to put down more money up front or choose a longer-term loan. Generally, financial professionals recommend spending no more than 10 percent of your take-home pay on the car payment, which will keep all car expenses (registration, gas, insurance) under 15 to 20 percent of your income. However, everyone’s budget is unique. Create a spreadsheet with all your monthly expenses on it. Look at what you spend for non-essentials such as entertainment and travel, and see where you can cut back to make room for a loan payment.

 

When you’re ready to find your dream car, head to Express Motors, LLC in Dayton, OH. They have a wide selection of high-quality used cars so you can find the perfect fit for your budget and lifestyle. They aim for complete customer satisfaction, which is why they offer extended warranties at affordable prices for their pre-owned vehicles and offer special financing. Head to the car dealership to start shopping. Check your trade-in vehicle value on their website, or call them at (937) 222-7777 with any car sales questions.

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