Frequently Asked Questions about a Washington Car Loan

Find the answers to the most commonly asked questions about Washington car loans below.

How do I know if I have enough for a down payment on a car?

For your own good, it's usually best to wait until you have a 20% down payment before you buy your next vehicle. Your Washington car loan will have lower payments, and you won't spend as much on interest. However, if your need for a car is urgent and you have decent credit, you can probably easily qualify for a car loan with less than a 20% down payment.

When a vehicle has negative equity, what does that mean?

Negative equity refers to a situation in which the owner owes more on a vehicle's loan than the car is presently worth. Borrowers usually fall into a negative equity situation when they protract the terms of their loans or make an inadequate down payment. You may also hear negative equity called being "upside down" in a car loan.

Will I have to present proof of car insurance to my lender?

Every lender will have a different policy, so you should ask your lending institution for details. In most cases, lenders require some proof that the car is protected, typically with collision and comprehensive coverage. Dealerships may also require the buyer to show proof of insurance before driving the vehicle off the lot.

Will my Washington car loan come from a lender in my area?

Our site has a nationwide scope, so your loan will not necessarily come from a local lender. Although we certainly include Washington-area lenders in our network, we make it our goal to refer you to the lender with the lowest rates, not the closest proximity. You may be paired with a lender that operates regionally or perhaps nationally.

How much of my income should my car payment consumer?

Ideally, you do not want a car payment that claims more than 8% of your gross income monthly. You may want to aim for an even lower percentage if you have large amounts of debt. Nationally, the average consumer spends about 11% of his/her gross income on car payments. For more help with spending tips, be sure to also go through the tips of determining what you can afford.

Are there any drawbacks to a Washington car loan with a long term?

Car loans with unnecessarily long terms, usually 60 months or more, will only hurt you in the long run. Of course, they will offer enticingly low monthly payments, but your interest expenses will be through the roof by the time you finish paying on the loan. Moreover, your car will be worth next to nothing after the term of the loan expires. Most financial consultants recommend keeping your loan term at 36 months or less if you can.