How much do you need for a down payment on a car?

If you are taking out a car loan, your down payment is the amount of upfront money you put toward the purchase price. it can be in the form of a lump sum cash payment, a trade-in, rebates or some combination of all three.

Some dealers will approve financing with zero down, especially if you have excellent credit, but making a down payment lowers your monthly loan payments and reduces the amount of interest you'll pay over time.

It'll also start you off with positive equity in your vehicle, helping prevent you from becoming "upside down" on your loan, or owing more than the car is worth.

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The recommended down payment on a new car has historically been at least 20%, according to Ed McFadden, senior vice president of communications for the American Financial Services Association.

"For used cars, the suggested down payment was at least 10%," McFadden added.

Rising vehicle prices and APRs have tightened budgets, however, and the average down payment for new vehicles in the first quarter of 2026 was roughly 13% to 14%. Still, a 20% down payment will help counter the depreciation most new cars undergo in their first year.

Capital One offers competitive auto loan rates and superior customer service. Financing is available to borrowers with credit scores as low as 540 and approval can take as little as 24 hours.

CarMax Auto Finance is our top pick for financing a used car, with an easy application process, a large inventory and no minimum credit score requirement. If you find a better rate within three days of closing, you can replace your CarMax loan at no cost.

The most direct benefit of a larger down payment is savings: If you make a 13% down payment on a new car priced at $30,000 with a 6.5%  APR, your payments on a 72-month term would be about $439, and you'd pay approximately $5,489 in interest over the life of the loan.

If you make a 20% down payment, however, your monthly payment will drop to roughly $403 and the interest is reduced to roughly $5,048.

Putting more down can also help get you approved and secure a better interest rate. While your credit score and income play a largert role, a generous down payment suggests you are in good financial health and more likely to meet the obligations of the loan.

It's possible to get a car loan with no money down, but terms will likely be less favorable.

"Your monthly payment would be significantly higher," Mark Schirmer, director of industry insights at Cox Automotive, told CNBC Select. "And, since there's more risk involved, it would likely mean a higher interest rate, as well."

In some cases, a dealership may offer a no-interest loan with no money down.

"When car sales are slow — think the economic collapse in 2009 — or conversely, when there is a great deal of competition to sell a particular type of vehicle, you may see a 0% APR advertisement for consumers who have good credit," McFadden said.

Typically, the manufacturer is paying the interest to get the vehicle sold. But, even then, your monthly payment will still be higher than if you'd made a down payment.

Many car dealerships accept credit cards for down payments, but APRs on cards are much higher than for auto loans. In addition, the dealer may have a maximum they'll accept on a card and tack on a convenience fee.

Putting a down payment on a credit card only makes sense if you can pay the balance before the next billing cycle.

If you're looking to take advantage of a hefty welcome bonus, the Capital One Venture X Rewards Credit Card earns 75,000 bonus miles when you spend $4,000 on purchases in the first 3 months from account opening, equal to $750 in travel. It also earns 2x miles on all non-bonus purchases.

Be sure to factor in Venture X's $395 annual fee when deciding if using the card to make a down payment is the right choice for you.

Another option is the Wells Fargo Active Cash® Card, which has a 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 18.49%, 24.49%, or 28.49% variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Ed McFadden, senior vice president of communications for the American Financial Services Association, a trade association for the consumer credit industry. We also spoke with Mark Schirmer, director of industry insights and corporate communications at Cox Automotive, the parent company of Kelley Blue Book.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every auto loan article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of loans. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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