If you want to, you can definitely make a 50% down payment on a car if you have the cash. It's uncommon, but as long as you finance at least the minimum amount – usually $5,000 if you have bad credit – lenders don’t have a problem with you making a really big down payment.
How a Larger Down Payment Helps Your Loan
For bad credit car buyers, the most common down payment typically asked for by lenders is $1,000 or 10% of a vehicle's selling price, whichever is less. However, we recommend that you make a larger down payment for the most benefit if you have poor credit, such as around 20%.
When you make a really large down payment, say around 50%, you’re going to see your auto loan really change for the better. Making a down payment as large as 50%t not only improves your chances for car loan approval, it also:
- Reduces interest charges
- Gives you a much smaller monthly payment
- Allows you to avoid negative equity
- Dramatically reduces the size of your loan
To see how a large down payment can help you, let’s take a look at an example. Say you want to finance a vehicle with a selling price of $15,000, and you were approved at an interest rate of 17%. Here’s how large down payment amounts affect your loan (calculations don’t include tax, title, and license fees):
| Down Payment | Loan Term | Monthly Payment | Total Interest Paid |
| $3,000 (20%) | 60 | $298 | $5,894 |
| $5,250 (35%) | 60 | $242 | $4,789 |
| $7,500 (50%) | 48 | $216 | $2,888 |
| $10,000 (Typical max down payment amount) | 36 | $178 | $1,418 |
Disadvantages of a Larger Down Payment
While you save more money by making a larger down payment, there are some disadvantages you need to be aware of. The two biggest cons of making a down payment that’s around 50 percent are:
- More money down doesn’t lower your interest rate – Bad credit car buyers get higher than average interest rates, and it’s extremely rare that a larger down payment can lower it. You typically can’t negotiate your interest rate with a lender, and providing more money down isn’t a guaranteed solution if you’re worried about your rate.
- A larger down payment cuts into your savings – Depending on the vehicle you choose to buy, 50 percent can be a lot of money to put down on an auto loan. You can use cash, trade-in equity, or a combination of both to make a larger down payment, but make sure you can afford to take that money out of your savings right now.
CarsDirect Tip: When budgeting for a car loan, don’t forget to include extra costs such as fuel and basic maintenance on top of insurance, taxes, and title fees. You may have the money right now to make a 50 percent down payment, but if something happens to your vehicle, make sure you have enough cash to cover emergency costs.
Ready to Get the Car Buying Process Started?
A larger down payment does help you save money on your auto loan, but it may not be practical if you’re on a tight budget. Make sure you know how much car you can afford, and how you plan on coming up with a down payment. If you’re stuck on what vehicle to choose, check out our new and used car sections to compare models.
Once you have an idea of what vehicle you want to invest in, CarsDirect can also point you in the direction of the right dealership for you. Fill out our no-obligation, free auto loan request form to get the process started right now.
FAQs
Typically speaking, if you're going to finance a vehicle, you should aim to pay as much as you can comfortably afford upfront. Depending on the cost of the car, you should aim to make a down payment of at least 20%, though it's not unusual for a buyer to pay 30, 40, or even 50% upfront.
Can you do a 50% down payment on a car? ›
Get Car Financing
If you want to, you can definitely make a 50% down payment on a car if you have the cash.
Is 50% downpayment too much? ›
Putting 50% down on a home could minimize the amount of interest you pay throughout the life of your loan. But a 50% down payment may be a lot of cash to tie up in a home, and you might risk having to borrow more expensively down the line.
Is it good to put half down on a car? ›
Down payments reduce the amount of money you must borrow and, thus, the interest you pay while repaying your car loan. Experts recommend a down payment of at least 20 percent. Larger down payments may prevent becoming upside-down on your loan.
Is 40% a good down payment on a car? ›
In general, you should strive to make a down payment of at least 20% of a new car's purchase price. For used cars, try for at least 10% down.
What is the smallest down payment you can put on a car? ›
Some auto loan lenders don't require down payments, but their loans typically come with high interest rates. Many other lenders have minimum down payment percentages, often ranging from 9% to 12%. If a down payment that's at least 9% of a car's value is too much for you, you may need to consider a cheaper car.
Is it wise to put a large down payment on a car? ›
It's good practice to make a down payment of at least 20% on a new car (10% for used). A larger down payment can also help you nab a better interest rate. But how much a down payment should be for a car isn't black and white. If you can't afford 10% or 20%, the best down payment is the one you can afford.
Is it bad to put too much down on a car? ›
The bottom line is that the more you put down, the lower your monthly payments are because you owe less total. higher down payment, less debt. Lower total paid in interest, lower monthly payments.
How much should I put down on a 30k car? ›
A down payment between 10 to 20 percent of the vehicle price is the general recommendation. But if you can afford a larger down payment, you can save even more money on interest payments over the life of the loan. By dropping the amount financed, you save some even before you start negotiating the car price.
How much should I put down on a 20k car? ›
As a general rule, you should pay 20 percent of the price of the vehicle as a down payment. That's because vehicles lose value, or depreciate, rapidly. If you make a small down payment or no down payment, you can end up owing more on your auto loan than your car or SUV is worth.
You can put as much as you want as a down payment but most lenders that dealerships use have a minimum amount financed. That amount can vary but most are $7500, some at $5000 and anything less gets harder to get a loan with lenders that offer good rates.
How to make a large down payment on a car? ›
Use a money order or electronic funds transfer (ETF): Because most dealerships won't accept a large down payment in physical cash, consider using a money order to certify the funds or have your bank transfer them electronically.
What is the payment on a $15000 car loan? ›
Advertising Disclosures
| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|
| $15,000 | 3 | $463.09 |
| $15,000 | 5 | $313.13 |
| $20,000 | 3 | $617.45 |
| $20,000 | 5 | $415.07 |
13 more rowsIf your credit score isn't good, however, you're typically required to make a down payment of at least $1,000 or 10% of the vehicle's selling price. This varies by lender, and some may accept the lesser amount. On a $20,000 car, that would be up to $2,000 down.
How much should you put down on a $50,000 car? ›
So, if you wanted to buy a $50,000 car, you should save up around $5,000 for the down payment. That would leave you with a car loan balance of $45,000. And the monthly payment on that amount would vary depending on two factors: the interest rate you were offered and the term of your car loan.
