Downpayments & Gap Insurance

You know the saying -- "Money talks, -------t walks" -- and there's nothing that will get the attention of a car salesman more than a solid downpayment. Some subprime lenders will demand a good downpayment as a condition for offering a loan, so if you can top their requirements, the better for you. And remember, an extra $1,000 down doesn't save you $1,000 -- it saves you $1,227 on an average loan.

Remember, too, that when you drive that car off the lot, once you add up all the interest you owe, you might owe more money than the car is worth if it's stolen (or totalled in a crash). Some dealers may require gap insurance (be pesky in the F&I office -- some dealers may automatically tack on gap insurance without really telling you) as part of the loan package.

Considering gap insurance can run as high as $500, see how a good downpayment can help you avoid that payment? The more equity you can put into a car, the better. Period.

So to conclude:

Find out about your credit and clean up as much
as you can.

Thoroughly research what you can afford, and
research the best buys for the money.

Unless your current ride is dead, do not
be in a hurry. Time helps build a
downpayment, improve credit and
provides time for research.

Never negotiate on a monthly price,
and always remember at a dealership
you have the power.

You can always walk away.

Always.