How to use the car down payment calculator
- Enter the vehicle price, then choose whether you will describe your cash down as a dollar amount or a percent of the price.
- Add any trade-in value and what you still owe on that trade-in. If you owe more than it is worth, the shortfall counts against your down payment.
- Open the advanced options to add a rebate, your own sales tax rate, fees you will finance, a loan rate and a term. The tax rate starts at 0 and the rate and term are examples you replace with your own offer.
- Read the total down payment and its percent of the price, then the amount financed and monthly payment. The table shows how other down payments change the loan.
Formula
down payment = cash down + (trade-in value - amount owed) + rebate
amount financed = price + sales tax + fees - down payment
payment = P x i / (1 - (1 + i)^-n)
i = APR / 12, n = number of months
Sales tax is the rate you enter times the price. At a 0% rate the payment is the amount financed divided by the number of months. Money is rounded to whole cents, half up. Interest is the payment times the months minus the amount financed.
$3,000 down on a $30,000 car
With $3,000 cash, no trade-in, no tax and no fees, the down payment is $3,000, which is 10% of $30,000. The amount financed is $27,000. At an example rate of 7% for 60 months the payment is $534.63, and the total interest is 60 x $534.63 - $27,000 = $5,077.80.
Now add an $8,000 trade-in that still has $10,000 owed, a $500 rebate, a tax rate of 6.5% (an example) and $400 of fees. Trade-in equity is -$2,000, so the down payment falls to $3,000 - $2,000 + $500 = $1,500, or 5%. Tax is $1,950, the cost is $32,350, the amount financed is $30,850 and the payment is $610.87.
Why the percent matters
A larger down payment shrinks the loan, which lowers the monthly payment and the interest you pay over the term. It also reduces the chance of owing more than the car is worth early in the loan, because new vehicles often lose value fastest in their first years.
There is no required percentage on this page. The table lets you compare the effect of 0% through 30% for your own price, rate and term. Lenders and dealers set their own rules, so ask them what they require.
Trade-ins with money still owed
Equity is what a trade-in is worth minus what you still owe on it. Positive equity adds to your down payment. Negative equity works the other way and is often added to the new loan, which raises the amount financed. If you are in that position, the negative equity calculator explores it in more detail.
To judge the whole purchase, continue with the car payment calculator or the car affordability calculator.
Assumptions and limits
- The loan is a simple fixed-rate loan with equal monthly payments and no extra payments. Real loans can have different terms, fees and day-count rules.
- Sales tax rules differ by place and may apply to the price after a trade-in or rebate. Enter an effective rate that matches your own paperwork; it starts at 0.
- Rebates are treated as part of the down payment. Some incentives are paid to the dealer or taxed differently, which is not modeled.
- The loan rate and term are examples. Nothing here is a loan offer or a statement of what a lender will approve.
Frequently asked questions
How much should I put down on a car?
This page does not set a target. Use the comparison table to see how each percent changes your amount financed and monthly payment, then choose the amount that fits your budget and your lender's requirements.
Does a trade-in count as a down payment?
Its equity does. Equity is the trade-in value minus what you still owe. If the result is negative, it reduces your down payment instead, and the shortfall usually has to be paid or rolled into the new loan.
Why does the payment use the amount financed and not the price?
You only borrow what the down payment does not cover. The loan balance is the price plus tax and fees, less everything you put down, and the interest and payments are worked out on that balance.
What happens if my down payment is bigger than the cost?
The amount financed shows as $0.00 and the payment as $0.00, with a note that no loan is needed. The calculator never shows a negative loan.