Auto Loan Down Payment: How Much Should You Put Down?
Understand how a down payment changes the amount financed and the resulting monthly payment.
A down payment reduces the amount you need to finance. If a vehicle costs $35,000 and you put $5,000 down, the starting financed balance is $30,000 before any additional financed costs.
Why the down payment matters
Borrowing less generally lowers the scheduled payment and reduces the amount on which interest is calculated. The exact effect depends on the APR and term.
Do not forget the cash you need at purchase
A down payment is only one part of the money needed to buy a vehicle. Taxes, registration, dealer charges, and optional products can change the amount due and the amount financed.
Compare scenarios
Use the ClearRateUS auto calculator to test several down payments while keeping the vehicle price, APR, and term constant. Then compare monthly payment and total interest.
Test your own amount, APR, down payment, and term.
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