Person handing a car salesman money for a car

How Much Should I Put Down for a Car?

Pros and Cons of Large and Small Down Payments

You may have found the perfect car for your needs and comfort. Perhaps you even got qualified for a car loan. As you close the deal, the question of how much you want to leave as a down payment is raised. How much should you put down for a car? Ideally, you’d want to put down around 20% of the purchase price. What if you have more than 20% of the cash saved? What if you have less? Here, we will explore the pros and cons of making large and small down payments.

Advantages and Disadvantages of Making a Large Down Payment


Lower monthly payments (or less months owed)

Potentially lower interest rates

Getting qualified for a loan is easier as you are borrowing less

More money saved in the long run


You will no longer have that extra cash on hand for other things

Toy car on top of money and next to a white calculator

Now, let’s flip the scenario and say that you decide to provide a small down payment. You’ll end up paying more in interest over time, paying more money every month, and you may have more difficulty getting qualified for a loan. Despite this, if you can’t afford to leave the recommended 20% and the vehicle is a necessity, it would make more sense to put down less money as you need the funds for basic living.

In general, we recommend paying as much as you can up front. Just be careful that you aren’t exceeding your budget so that you don’t struggle to pay your other bills as a result. If you are considering a vehicle but not ready to buy one just yet, start saving for a down payment early.

[ READ MORE: Tips for Online Car Shopping ]

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