I do car loans as part of my job at State Farm. If we were to look at strictly amount financed and monthly payment:
take car 2 for example but change it to the 60 months due to the 0%apr.
Car 2: $30k drive out
$5k down or No money Down
0% APR @ 60 months - no credit help for lower payments
brand spankin' new.
Now just on Monthly payment using the simple math, no credit involved and no dealership qualifying you for a lower price using credit:
With 5k down,(25,000 financed): monthly payment would be $416.66 (about)
25000/60
With no money down: monthly payment would be $500.00 (about)
30000/60
That is at the start, then when whatever APR you agree to, if it is a higher APR the monthly comes down, if you choose a lower APR the monthly goes up.
So yes the amount you put down on the vehicle will affect the monthly payment because it affects the overall amount you do have to finance: either $25,000 or $30,000. But if there is a 0% APR in play, Whether or not you put the 5k down it will not change the amount financed.
Its all personal preferrence on whether or not you want a higher car payment or a lower car payment when putting money down. Not only that but the amount you put down on the car could help qualify you for a lower monthly payment anyway. Could be used as a type of collateral on the car. Dealership will be more comfrotable giving you a bit lower price because they know you paid to have that monthly payment. If worse comes worse for the dealership and the person defaults on the loan, they repossess the car and keep the money.
That is where you are correct at one point Davey, is that if you do get 0% APR,it does not affect the amount you do have to pay between now and much much later.
As for using the money little by little by paying for the difference between your requested monthly payment and the monthly payment given. you acutally pay out like a dollar more than 5k. comes out to like $5000.40
The 5k has already been saved for the car, why not use it for what it was intended rather than it be possibly spent on something else during the course of 5 years.
Will credit get you that lower monthly too by the dealership or bank, abosolutely.
Like I said, all Personal Preference with their financial situation.
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