Question

When buying a car, a _______down payment is recommended.

1. 0%
2. 10%
3. 20%
4. 50%

Answer 1

A 20% down payment is recommended when buying a car, but the actual amount may vary depending on individual circumstances. Making a larger down payment can help lower loan payments and reduce interest paid. There are also alternative options like leasing with smaller down payments.

Step-by-step explanation:

A general rule of thumb when buying a car is to make a down payment of 20% of the car's purchase price. This means that if the car costs $20,000, you should aim to put down $4,000.

It is important to consider your budget and financial situation when deciding on a down payment. While some people may choose to make a smaller down payment or no down payment at all, a larger down payment can help lower your monthly loan payments and reduce the total interest paid over the loan term.

However, it is also worth noting that there are other options available, such as leasing, which may require a smaller down payment.