The ideal down payment for a car depends on whether you are buying or financing. A standard recommendation is to put down at least 20% for a new car and 10% for a used car to minimize your loan amount, reduce interest costs, and avoid owing more than the car is worth.
However, many lenders offer financing options with lower down payments, sometimes as little as 0% down for qualified buyers. A larger down payment can help you:
Lower Monthly Payments: The more you put down, the less you need to borrow, resulting in smaller monthly payments.
Reduce Interest Costs: A lower loan amount means you pay less in interest over time.
Improve Loan Approval Chances: A higher down payment can make you a more attractive borrower, especially if you have lower credit.
Avoid Negative Equity: Cars depreciate quickly, and a solid down payment helps prevent owing more than the car’s value.
If you are financing a car, Auto Bandit can help you explore flexible financing options with different down payment amounts to fit your budget. Visit us today to find the best deals!
