General Question

livelaughlove21's avatar

Typical down payment and monthly payments on a used truck?

Asked by livelaughlove21 (15715points) December 9th, 2011

My fiance doesn’t have sufficient credit to be approved for financing at a dealership. He doesn’t have anyone to cosign with him either. He doesn’t have BAD credit, but he doesn’t have much of a credit history…which is apparently worse. He’s 22 and brings home about $3200 a month at the job he’s had for about a year.

Since dealerships will reject him, we’re unfortunately probably going to have to go to one of those buy here pay here places. I know it won’t affect his credit like we’d like it to and we’ll end up paying more for the car than it’s worth in the end, but we’re out of options. His current truck is a ticking time bomb and he needs to get out of it, but he can’t afford even a cheap truck out of pocket right now.

We’re looking for a truck that’s around $10,000. His insurance will have to go up to full coverage, which will make it increase by about $100, so we’re trying to figure out if this is possible for him.

For a $10,000 truck—
1.) Is a $1,000 down payment sufficient?
2.) How much would the monthly payment probably end up being?

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3 Answers

tedd's avatar

Rule of thumb if I recall correctly is $20 a month payment for every $1000 total principle. This is assuming an average interest rate (like 3–6% range). If your interest is higher, your monthly rate will be higher. If your interest is lower, your monthly rate will be lower.

On my brand new car (well it’s like 10 months old now), I pay roughly $300 a month. The purchase price was roughly $17,500, and the interest rate is 0.9%.

Used cars I was looking at ranged between $8000 and $12000, and my CU offered me an interest rate around 5%. My payments were going to be in the $180—$220 range.

YARNLADY's avatar

Don’t be so quick to decide in advance what a lender will do. Many dealers are desperate for buyers who will pay back the loan. The history is actually less important than the projected future.

You can get possible finance information by clicking on the financing section of the online Used Cars for Sale sites.

Tropical_Willie's avatar

Try a regular dealer, the “Buy here, pay here” can have interest rates over 20 %. And they don’t have service or maintenance for future oil change and other things. Some “buy here, pay here” are on the TV with Repo shows, some cars may have had three or more owners in the last six months.

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