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what is a down payment

Money Matters

Why do you need to put cash down?

May 24, 2010
In my last blog, I listed 15 ways to save money for a down payment on a new vehicle. There are several reasons putting cash down is so important to YOU from a financial standpoint. First and for most, a down payment will help you get approved by the bank or lending institution. In some cases, it is necessary to have a certain amount down in order to be approved for a loan. Secondly, by providing a down payment, you are setting yourself up for a better equity position. Having a vehicle to trade-in with positive equity is just like having a down payment! And lastly, and perhaps the most important, having a down payment will lower your monthly payment. We are all on a budget and we have to plan for our monthly expenses. The McCarthy stores average about 10 percent cash down of purchase price on each deal. It is not a requirement by our stores, but a requirement by the banks. How important is a monthly payment to you? And, can you think of any other ways to save for a down payment?