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Do car dealerships want a big down payment on a vehicle?
I'm looking at a Honda Civic that costs $25,000. I have $12,500 for a down payment. When I told the salesman, he gave me a weird look and said that was probably too much to put down. I've heard from other people that a large down payment means that car dealers are more likely to give you a deal.
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
“It’s actually a split, but in most cases, dealers will gladly take your money.
Without getting into the jargon behind it, the time value of money states that money in hand now is worth more than in the future due to inflation.
Therefore, a big
down payment
will usually cause a salesman’s eyes to light up. Furthermore, they may also be more likely to work with you on a deal.As far as the salesman’s reaction, he might have just been caught off guard. Few people make that big of a down payment. The average amount is about 11%.
Take it with a grain of salt. If you want to put that much down, go for it. Doing so will lower your monthly payments and may help reduce your interest rate.
Also be aware that the lender will require insurance on your financed vehicle, so be sure to shop around for
car insurance
.”View full answer
- Gregory R.
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Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
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