Auto LoansGlossary
Down Payment
Cash you put toward a vehicle purchase, reducing the loan amount.
Auto-loan down payments of 10-20% are standard. Higher down payments reduce LTV, lower your monthly payment, and shorten the time you're underwater on the loan.
Should you care?
Should you care about Down Payment?
When you need it
Lenders prefer 10-20% down for new cars, 10%+ for used. A bigger down payment lowers your APR, shortens the period you're underwater, and shrinks your monthly payment.
What it costs you
Each $1,000 of down payment cuts your monthly by ~$19 on a 60-month 7% loan. 20% down vs 0% down on a $30k car saves $700-$1,500 in interest over 5 years.
Frequently asked
Down Payment — FAQ
Put it into practice
Where Down Payment matters on CarSavr.
Referenced in
Where Down Payment fits in the bigger picture.
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