Question

Eventually we will be buying a new car. What is a good down payment?  

Answer 1

100%. You really should only buy what you have the cash for.  

Comments

@slow0 yes! I agree!  

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Agree  

Answer 2

I’m saving to pay in cash. Is that possible for you?  

Comments

@haplite56443 I just paid my car off and I am going to put away any and every bit we can.  

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@ovary good! I decided that I’d budget for $15, 000. I don’t need a new car or anything fancy so I think that should be okay. I plan on buying in approx 5 years so I divided it by how many paychecks I’ll have by then. So I save $112 biweekly for my new car fund. I have a 2012 Honda Civic that still has a lot of life in it.  

Answer 3

I know having 25k-35k available for a car is unrealistic for a lot of people. Good rule of thumb is check your local bank, get the rates available to you and see if xyz payment is doable for you

Answer 4

I will add a second comment to your “surprised” emoji and remind you that you do not need to buy a brand new 20-30, 000 vehicle. My last vehicle purchase was a $4, 000 Ford Focus that I paid cash for. The whole goal of all of this is not to owe anyone and absolutely not to accrue even more debt once you’ve started this journey. Think of how much more money you’ll have in your pocket every month if you take that down payment that you have and purchase a vehicle of that price. No car payments ever again? Save that “monthly payment” each month for 3 years and drive off of the lot with a brand new vehicle that you own.  

Comments

@slow0 that may be your goal but everyone’s goals are different. Some people don’t mind having a mortgage or a car payment. Miko has said this many times.  

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@slow0 we own 2 cars outright. My hobbies car is older and has a few small issues. We wont get anything for a trade in. It has been in 2 bad accidents and has 125, 000 milestone it.  

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@ahoy98 a mortgage is completely different than a car payment. The OP asked what a good down payment was and I explained my reasoning for my first comment and what the benefit is to purchasing it cash.  

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@slow0 I was just referring to your comment “the whole goal for all of this is. ” that’s not true for everyone.  

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@ovary wow, 125k miles would be extremely low for an “older” vehicle. I have a 2018 and it has 92k on it  (mine was purchased used and was utilized as a fleet vehicle before I bought it so I got an AMAZING deal on it)

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There are different financial goals for everyone. We consider car payments and our mortgage different from credit card debt and we are ok with having them right now.  

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@slow0 we really don't drive a lot. My car is a 2013 and it has 65, 000mi

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@ahoy98 yes! I came here looking for a comment like this because it’s spot on. Budgeting is a personal journey and there isn’t a unifying goal for any of it. It’s a journey of self understanding and of finance  

Answer 5

Pay cash if you can! Minus one car, weve never paid more than $10, 000 for our vehicles, and they have all served us well! 100-120k miles of use, minimal repairs, great gas mileage. Figure out what you want, and what your budget is, and don’t budge on your requirements. we’ve had so many dealers tell us our budget is to low, or unrealistic, etc. but we keep persisting, and we always find what we want if we give it time

Answer 6

I don't think it's bad to finance - especially if you get a good interest rate. We could have bought our car (purchased today) in cash, but the interest rate is so low that it barely cost anything to borrow. To us it didn't make sense to take 80% of our savings account and dump it on a car when we can easily budget a payment and pay off early at and point. I'd say look at your balance - what kind of down payment works and still leaves you a workable monthly payment and a safety net in your bank account.  

Answer 7

I’ve been working on a $2000 down payment for a new car, and just pay it monthly till it’s paid off. That’s what I’m doing, then I’m selling my car I have now.  

Answer 8

100% for sure. No reason to finance a car.  

Answer 9

I think a good answer is as much as you can put down, or whatever you need to put down to buy the car you want at a payment you’re comfortable with. Lots of people here will say save to pay cash, which is great if that’s your goal/what you want to do. But that isn’t the right answer for everyone or everyone’s goal! Some people are totally okay with having a car payment! I think the important thing is to make sure you figure out what payment you’re comfortable with and don’t over buy!  

Answer 10

I think as much as you can, but I don't think financing a car is the worst thing. it gives you a reliable car with less maintenance costs and worry for things breaking down and repair costs. It depends what your needs are. but as much of a down payment as you're able to get together by the time you absolutely need to buy is really the goal :)

Answer 11

Figure out what you're comfortable with as a car payment and what that would look like as a loan amount. You can get on a car loan calculator and put in different numbers and terms to see what you'd like. We've never done a down payment but I think any DP would be good and will only lower your monthly payment ☺️

Comments

My parents always buy a car saying “I want my payment to be no more than $___ /month how much would I need to put for a down payment in order to achieve that ” they are always able to tell her if she hasn’t figured it out previously.  

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@shocker can you put in your current credit score to get an “accurate” payment amount and interest rate.  

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@lempres56 I don't think you can put in your score but you might be able to put if you have good/great/excellent. I usually check with our banks current rates and use that bc we have always gotten a good rate.  

Answer 12

We aim for 8k to 10k for a new. Vehicle.  

Answer 13

It’d be better to pay cash for the car. I also wouldn’t buy a brand new car with the depreciation rate of new cars.  

Answer 14

I paid 6k plus a Jeep trade in for my truck. Got 10k below asking price out the door. Plus no financing charges. 28k total for a 38k+ tac title license vehicle

Comments

@rhaetian that's awesome  

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@ovary gotta save. Saving saves you money in a lot of ways.  

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@rhaetian that's what we are trying to do! I am putting it in our credit union account.  

Answer 15

No more than 5k. It also depends what type of vehicle you’re looking to get the rate and the amount of months you’ll finance. There isn’t much difference in a monthly payment of you put over 5k down unless you’re buying the car outright.  

Answer 16

I think the most interest I have ever paid on a vehicle is 2. 9%. As long as you have decent credit. Just make sure it’s a payment you can afford. I never finance more than 60 months.  

Comments

@corene May I ask what your score is? My husband and I both have at least 650+ and want a new car because we’re expecting baby #3.  

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When I have bought in the past, I was low 700’s fico (I can never get higher than 670 on credit karma ‍♀️). Dealerships have a lot of negotiating power with different banks. We have walked away and they called us back from the parking lot for better deals.  

Answer 17

There’s the pay cash or don’t buy group and then there’s the interest rates are so low on cars that your money is more useful invested and don’t put any cash down group. It’s confusing.  

Answer 18

My idea is $2, 500 Mine lol! I don’t know other people! And if buy I planning buy something no more! The $16 ( this is planning, idea if we do) we know don’t recommend do payments car! But sometimes! We follow our on plan  

Answer 19

I put down 5k. I wanted to do more since I had the money but my dad told me not to.  

Answer 20

We buy brand new cars, so we out down half or more. I still have my 07 Corolla I bought with 102 miles on it. We started saving to replace it when we payed off our van. We put 10k down and financed the rest. We paid it off in two year. We could have done it sooner, but our parents are older and not in the best of health. We wanted our kids to make memories with them and not say no to everything.  

Answer 21

100% down.  

Answer 22

We are saving for a second car right now . A third row SUV. We have 11k saved so far. It's the newer Subaru . Drawing a blank on the model lol . I'm trying to pay in cash and it's not needed at the moment. I'm waiting for people to trade in their leases

Answer 23

Always check out the pre-owned lot. My friend just bought a 2020 Explorer Limited on the used side. $13k less than a brand new one. Old owner bought it August last year, drove 6400 miles, and traded it in. All the benefits of a new car but without the normal price tag.  

Comments

Note: Every $1, 000 down is $20 less of a payment.  

Answer 24

Whatever you are comfortable with!  

Answer 25

Keep in mind for every $1000 you down will typically only lower your payment by $10-20. So while having a small down payment will help with financing, it’s not REALLY beneficial to have a large down payment if you’re planning on having a full term loan.  

Comments

@berstine good to know!  

Answer 26

I give enough to get my monthly payment down. So I put 11k on a 21k car.  

Answer 27

No down payment and cash it out

Answer 28

I just bought a car yesterday. I put down $1k. We contemplated doing more, but felt more comfortable with leaving the money in savings with the way things are currently.