RCSC 150B2 Chapter 7: Auto and Home Loans
6 Dec 2017
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Document Summary
Identifying your needs is the first step in selecting a vehicle. Ideally you want to pay cash for all your vehicles. Two factors determine if you can afford a vehicle. Many lenders require a 20% down payment. Need to determine how much you can afford while keeping your overall debt-to-income ratio at 36% or less. Most new cars depreciate 35% to 40% in the first 3 years of ownership. Might be able to get a lower interest rate rather than a used car. May also be eligible for dealer and government rebates and incentives. Many dealers have them for active military and new college grads. Work well for those who want to drive a new car every 2-3 years, drive a low number of miles, and take good care of their car. Lease: long-term rental agreement with a limit on the number of miles that can be driven without penalty.
