Auto Loan Down Payment Calculator Calculate your ideal down payment, see how it affects your monthly payment and total in...
Auto Loan Down Payment Calculator
Calculate your ideal down payment, see how it affects your monthly payment and total interest, and visualize your loan repayment schedule.
Illustration: Higher down payments reduce your monthly payment and total interest paid over the life of the loan.
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A down payment is an initial upfront payment made when purchasing a car, typically as a percentage of the vehicle's total price. The remaining amount is financed through a loan. For example, on a $35,000 car with a 20% down payment, you pay $7,000 upfront and finance the remaining $28,000.
Down payments are important because they:
- Reduce your loan amount — which lowers your monthly payment and total interest paid.
- Lower your risk of being "upside down" — owing more on the loan than the car is worth.
- Improve your loan terms — lenders may offer better interest rates to borrowers who make larger down payments.
While some dealerships offer "zero down" financing, it’s often not in your best financial interest unless you have excellent credit and can afford higher monthly payments.
Making a smart down payment can save you thousands of dollars in interest and protect you from negative equity. Here’s why:
- Lower Monthly Payments — A larger down payment means less to borrow, which translates to smaller monthly payments.
- Less Total Interest — Since you're borrowing less, you'll pay less interest over the life of the loan.
- Avoid Negative Equity — Cars depreciate quickly. If you put little or no money down, you may owe more than the car is worth for the first few years — known as being "upside down." This can be problematic if you need to sell or trade in the car before the loan is paid off.
- Better Loan Approval Odds — Lenders view borrowers with larger down payments as lower risk, which can lead to better interest rates and loan terms.
Rule of Thumb: Aim for at least 20% down on a new car and 10% on a used car to avoid negative equity and secure favorable loan terms.
To calculate your ideal down payment and loan details, enter:
- Car Price — The total cost of the vehicle you want to buy.
- Down Payment Percentage — The percentage of the car price you plan to pay upfront.
- Loan Term — The number of years you’ll take to repay the loan.
- Annual Interest Rate — Your estimated interest rate (check current rates from banks or dealers).
- Trade-In Value — The value of your current car if you’re trading it in.
- Sales Tax — The sales tax rate in your state (typically 5–10%).
Click “Calculate Down Payment & Loan” to see:
- Your down payment amount
- Your loan amount (after subtracting down payment and trade-in, plus adding tax)
- Your monthly payment
- Total interest paid over the life of the loan
- A visual chart showing how different down payments affect your monthly payment
- An amortization table with details for each month
Note: This calculator assumes a fixed-rate loan with equal monthly payments. It does not account for variable rates or balloon payments.