There isn’t one down-payment amount that works for every buyer. A larger down payment reduces the amount you need to finance, which can lower your monthly payment and total interest. It may also help reduce the risk of owing more than the vehicle is worth early in the loan.
However, putting every available dollar into the car isn’t necessarily a good idea. You should keep enough cash for emergencies and other important expenses instead of leaving yourself with little savings after the purchase.
Consider the vehicle price, your income, existing debts, credit profile, interest rate, and how long you plan to keep the vehicle. If you have a trade-in, its value can also reduce the amount you need to finance.
Before choosing your down payment, compare several scenarios. Our auto loan calculator can show how changing the down payment affects the estimated monthly payment and overall loan cost.
