Car buying - what kind of deposit?

Joss

Joss

Joined
Nov 20, 2001
Messages
7,353
Guys,

I'm considering getting a new car. I'll get either the Toyota Highlander, the Honda Pilot, or the Toyota 4Runner. I might stay on the smaller side and go instead with the Toyota RAV4 (I have a '99 right now).

I'm curious what kind of deposit I should expect to be asked. I'm going to get some financing of course, but does anyone know how much I should put down in cash?

Thanks,

JD
 
My advice to you is to avoid Ford Motor Company products as if they were a spewing geyser of Ebola Zaire. We can put a man on the moon using slide rulers and crappy radios, but we can't make a truck that can take 80,000 miles of light duty without major repairs. "Built Ford Tough"....don't beleive the lie!!!! Paying the extra money for a Tacoma is money well spent. Best of luck to you, and don't let the sales thugs bully you into something unaffordable. Put 10% down you should be o.k.
 
It depends on the rate you can get. If you can get into one of those 0% type loans, then put down as little as possible. But, read the fine print on those teaser-rate loans. Otherwise, put down as much as you can.
 
more down less you finance -so the less interest you pay -

also dont give them a dime till the papers are ready to be signed-if you give them 500 so they can run the paper work then come back with a higher payment than you wanted and you decide to go elsewere it will be a beotch to get your money back in a timley maner-
 
I would work backwards from estimated cost. Once you decide on make/model, figure out what you can pay per month, and keep the interst-rate and period of finance as short as possible, with down-payment included in the mix. That interest money will take away from the knife fund!
I am sure you have researched, but the Honda Pilot is top-notch (not that Toyota isn't). My daugther has a '03 RAV 4 and it is been great. The new models are larger, of course.
Good luck with your decision!
 
put down as much as you can. Unless there's some kind of special deal with incredibly low rates, there's no way you'll earn more on your money than you'll spend in interest on the loan. Personally, i purchaced my last 2 cars cash in full.
 
Always put down as much in deposit as you can (car, house, boat, whatever you plan on financing).

As the others have said, the less you have to finance, the better you will be in the long run. It's always easy to be blinded by what's immediately in front of you (in this case the monthly payment) but you want to look at the big
picture - ultimately how much is this going to cost you in the end.

Good luck! Great choices on your vehicles by the way!
 
It's unclear to me what you're talking about.

I think of a deposit is something you put down to show your interest but before you buy. If that's what you're talking about that amount should be zero. You should never leave any kind of money, your keys or anything else the car salesman can hold hostage over you.

How much you should finance is up to you and your credit rating. Ideally if you have the cash flow go for 0% financing, the amount per month can be higher, but you're not paying interest.

Try and get financing on your own before. We have twice bought cars through our insurance company and received very good rates with no add on financing BS the dealer will try and add on.
 
Thanks. I did mean the cash payment, not a deposit. I have the savings to pay cash if needed, and I also have a great credit rating. Apparently, one reason why my score isn't hire is that they don't have enough history (i.e., I don't have enough debt), so maybe it would make sense for me to take some debt on.
 
I have the savings to pay cash if needed, and I also have a great credit rating. Apparently, one reason why my score isn't hire is that they don't have enough history (i.e., I don't have enough debt), so maybe it would make sense for me to take some debt on.
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By all means pay cash if you can, especially if your credit rating doesn't need a boost. By financing and making payments you'll spend a lot more for the car, money that could have been spent to buy a nicer vehicle or just saved/invested.

As mentioned, if you can get a 0% loan (don't know how often Toyota has those deals), you might be better off to make payments if you can earn interest on the money by keeping it yourself.

The Honda Pilot did not earn an Initial Quality placing this year, but the Toyota Highlander was #1 in it's category and the Toyota 4-Runner was #3.

My advice to you is to avoid Ford Motor Company products as if they were a spewing geyser of Ebola Zaire. We can put a man on the moon using slide rulers and crappy radios, but we can't make a truck that can take 80,000 miles of light duty without major repairs. "Built Ford Tough"....don't beleive the lie!!!! Paying the extra money for a Tacoma is money well spent. Best of luck to you, and don't let the sales thugs bully you into something unaffordable.
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Don't know why you felt the need to brand-bash Ford since he wasn't even asking about their models. But FYI, the Ford Ranger is the #1 midsize truck for initial quality in 2006. The Tacoma failed to even place in the top 3.

-Bob
 
If you dont have that much credit history and you want to increase your score, say you are considering buying a house in 3-5 years, then financing some of new car purchase would be an excellent way to do so.

A higher credit score resulting in a lower finance rate on new house may pay for or offset the car loan. Maybe ask your local bank or credit union ?

As for the car itself, the 4runner with the 8 cyl, is a truck based suv while the others are car based. Im assuming the 4runner is the one you really want. lol
 
I just tried the Highlander and the RAV4, and they are OK. I like the RAV4, but I was disappointed by how similarly sized the Highlander is. I'm looking forward to trying the Honda Pilot. The 4Runner is probably too much for me. I mostly use the car for commuting anyway.
 
No, too small, not enough juice. It's not a bad car, but it's not what I need.

By the way, although I appreciate the suggestion, I don't have any trouble deciding what car to buy. Thanks!
 
Powernoodle advises you to save up and pay cash instead of buying something you can't afford (debt = "I can't afford it").

I know. I'm crazy. But I'm also 100% out of debt and want others to experience the bliss. :thumbup:

Edited: I see that you said this - "I have the savings to pay cash if needed". So thats groovy. Pay cash. This stuff about a credit rating is hogwash. You don't need a FICO score to get a home mortgage, and everything else you can pay for with cash. Just think about it, before you tie yourself to $380/month for 66 months, and end up with a depreciating asset on which you owe more than it is worth. :)

cheers
 
Joss said:
Why? Just for the cost of the loan?
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There are three reasons to make the biggest down payment you can: First, it lowers the overall cost to you of the loan. Second, it lowers your monthly payment which will make it less likely for you to get in trouble down the road. Third, a substantial down payment (10% or more) reduces the lender's perceived risk which you can use to negotiate a bit off the interest rate.
 
powernoodle said:
Powernoodle advises you to save up and pay cash instead of buying something you can't afford (debt = "I can't afford it").
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This is good advice. But I think that Donald Trump and a lot of other very, very wealthy people would disagree with you. Not all debt is bad.

There are two kinds of debt: good and bad.

Good debt is money that you borrow to enable yourself to make more money. Good debt can also be that you borrow to purchase a substantial, durable asset that will persist long after the loan is paid off. And all good debt is debt that stays above water (which means that the asset is always worth more than you owe on it). A car loan can be good debt. Many people need a reliable car in order to do their job, to get to work and back if nothing else. A good car will last ten or twelve years. If you can buy it on a four year loan, then you'll have six or eight years left in it when you're done paying the loan. Car loans, especially on new cars, are a problem, though, because they can easily go underwater. Cars take a big hit to their value the moment you drive them off the lot. This is why I think the one good way to buy a car, if you can't afford cash, is to look for a one-year-old used car that's still got four years of factory warranty left, buy it for a substantial down payment on a four year loan.
 
Joss said:
I'm going to get some financing of course, but does anyone know how much I should put down in cash?
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If you get a 0% loan (a friend of mine just got one from Toyota), finance 100% of the purchase price. Otherwise, pay as much down as you can.
 
joss. i like the honda pilot and almost bought one a few years ago. it is a very comfortable driver that gets fair gas mileage (better than most in class though) and has many well thought out features. it is worth upgrading to the EX trim line.... 4wd is another matter...it is an expensive feature most people do not need. even in areas with snow.

as far as borrowing money for a car. i try to avoid it and i disagree with gollnick that it is a "good debt". a car is a depreciating asset...most wealthy people do not borrow money to buy things that go down in value. i do agree that a 2-3 year old used car is a much better deal

i would not be too concerned about your credit score. if you have a good income, pay your bills on time, and have a decent downpayment you will get a very competitive mortgage on a home...which is the only loan "worth getting"
 
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