RRP RSX-S
Senior Member
I understand your point. Lower interest means cash down barely affects the payment. So why bother.Why would you never put that much down? This isn't a low interest market anymore where before I would of agreed with you.
In a high rate market $1000 down for example has a much bigger impact on payments.
So the value of a down payment seems much higher in a high rate market.
However, the real reason you shouldnât put a ton down actually doesnât change at all. And itâs that your cash should have long term growth (when properly invested) at a higher rate than a loan would be (with good credit). So keeping your cash invested and making higher payments for the car is actually more financially sound. Even though it doesnât seem like it.
Thatâs also why I said if you canât make the payments without cash down aka the bank probably wouldnât approve you, youâre looking at a car you probably shouldnât buy.
But there are circumstances where this theory is wrong. Maybe you have a massive cash flow and itâs not a big deal. Ultimately you do you. Iâm just a guy on the internet giving unsolicited advice