This post explains how your credit score affects the pricing of your car. 1) we consider the down payment you will most likely be required to pay based on your credit score. 2) we consider the interest rate you will pay and what effect it has on your monthly payment.
- Get your latest credit score here.
Below a 550 – you are going to have a hard time getting financed for a brand new car without a large down payment (20% or more). However, there are websites that will help you finance a used car. You may have luck financing a car with less of a down payment if you have a decent car payment history (you made your previous car payments on time). Most new car lenders will submit your applications to multiple lenders. It's really difficult to say what they will eventually require. You'll just have to go to the car dealership and see.
Credit score between 550 and 650 – you should not have a problem financing a new car if your recent credit history (last six months) is clean. A modest down payment may be required to show the lending institution you are serious about your car purchase. You will probably need to give the dealer a down payment of around 5% to 20% of the car purchase.
Between 650 and 700 – You will have no problem getting financed (assuming you have no delinquent marks in the past six months). You can most likely get a new car with a modest $500 down for almost any car.
People with credit scores above 700 will have no problem getting a new car, and may even qualify for 0% financing with little or nothing down. It really depends on the dealer and financing company they use. Not all dealers or financing companies offer 0% financing. Call around. The ball is in your court.
|FICO score||APR||Monthly Car Payment|
Invoice Price – the price the local dealer paid for a car.
Down Payment – the total amount of money required, usually in cash, at the closing of the vehicle sale.
Credit Score – Your FICO credit score is what most dealers will use to determine your credit worthiness.
APR – Annual Percentage Rate; is a rate that indicates the total cost of borrowing on a yearly basis. Higher number are worse.