Cost examples updated November 6, 2026
On a $48,000 new car, 20% down is $9,600. On a $25,000 used car, 10% down is $2,500. Those are the numbers most guides land on, a common yardstick, not a rule every lender sets and not a command. The rest of this page puts the choices side by side, on the same car, so the trade-off is visible in dollars instead of slogans.
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Down payment calculator
Set the price, the down payment, the rate, and the loan length, and the calculator works out the payment and the interest. The table underneath shows the same car at 0%, 5%, 10%, 15%, 20%, and 25% down, so each level can be compared with the others at a glance.
Go ahead, play with it. Change any number and watch the total move.
Your car and loan
Change any number, the results followAPR is the yearly interest rate on the loan, in percent, the price of borrowing, before fees.
%- $7,000Down payment20% of the price
- $28,000Amount financedprice minus down payment
- $6,064Total interestover the full loan
- $41,064Total paiddown payment plus all payments
Same car at every down payment
8% over 60 months| Down payment | Money down | Loan | Monthly payment | Total interest |
|---|
The highlighted row is the down payment set above. The table holds the price, the rate, and the loan length still, so the only thing changing from row to row is the down payment.
Where the numbers come from: Vehicle price: Kelley Blue Book, September 2026, average new car $50,562; iSeeCars, August 2026, average 3-year-old used car $32,651 · Interest rate: Experian, Q2 2026, averages 6.35% new, 11.19% used · Credit tier: Experian, Q2 2026, average APR for that tier · Down payment: the widely cited rule is 20% on a new car and 10% on a used car; buyers actually averaged 11.6% on a new car, Edmunds, Q2 2026.
The same $48,000 car at 0%, 10%, and 20% down
A down payment is the money handed over first, when the car is bought. The rest is the loan, the amount borrowed, and it is paid back month by month, plus interest, which is the extra money paid for borrowing. APR is the yearly price of borrowing, shown as a percent. Here is one car, three down payments, everything else held still:
| Down payment | Money down | Loan | Monthly payment | Total interest |
|---|---|---|---|---|
| 0% down | $0 | $48,000 | $973 | $10,396 |
| 10% down | $4,800 | $43,200 | $876 | $9,356 |
| 20% down | $9,600 | $38,400 | $779 | $8,317 |
The inputs, stated plainly: car price $48,000; 8% APR; 60 months (five years) to pay; loan equals price minus down payment. Moving from nothing down to 20% down lowers the payment by about $195 a month ($973 to $779) and lowers the total interest by $2,079 ($10,396 to $8,317). The total paid over the loan falls from $58,396 to $46,717, a difference of $11,679, which is the $9,600 handed over first plus the $2,079 of interest that never gets charged. Sales tax, title and dealer fees, insurance, gas, and upkeep are not in this table: they are paid on top of the loan in a real purchase, and leaving them out keeps the comparison about the down payment alone. Payments and interest are rounded to the nearest dollar, so a row may be off by $1 from the exact cents.
Why more money down means less interest
Interest is charged on the amount borrowed. Borrow less, and there is less for interest to be charged on, that is the whole mechanism, and it runs in the same direction on every loan. A bigger down payment also shrinks the loan balance from day one, which matters for a second reason: the gap between what is owed and what the car is worth. Cars lose value over time, that loss is called depreciation, and if the loan balance is higher than the car's value, the owner owes more than the car is worth. That situation has a plain name in car guides: being "upside down" (or "underwater") on the loan. It bites if the car has to be sold or is totaled, because an insurance payout follows the car's value, not the loan balance. More money down starts the loan closer to the car's value, so that gap is smaller from the start.
New cars: where the 20% number comes from
For a new car, the guides' yardstick is 20% down. NerdWallet's January 2026 guide puts it this way: at least 20% of a new car's price, and it notes that through 2025 the average new-car price sat around $48,000, which is where the $9,600 figure comes from. The reason given is the one in the section above: a new car's value falls fastest early on, so a bigger cushion at the start keeps the loan balance nearer the car's value while that early drop happens. On the $48,000 example, the 20% row is the $779-a-month, $8,317-interest row in the table.
Used cars: where the 10% number comes from
For a used car, the guides' yardstick is 10% down. The same NerdWallet guide notes the average used-car price had passed $25,000, which is where the $2,500 figure comes from. The reasoning is different from the new-car case: a used car has already been through its steepest value drop before it is bought, so the gap between loan balance and car value starts out smaller, and a smaller cushion covers it. The same pattern holds on a used example, at the same 8% APR and 60 months:
| Down payment | Money down | Loan | Monthly payment | Total interest |
|---|---|---|---|---|
| 0% down | $0 | $25,000 | $507 | $5,415 |
| 10% down | $2,500 | $22,500 | $456 | $4,873 |
| 20% down | $5,000 | $20,000 | $406 | $4,332 |
On the used example, moving from nothing down to 20% down lowers the payment by about $101 a month ($507 to $406) and the total interest by $1,083 ($5,415 to $4,332). The 10% row, $2,500 down, $456 a month, $4,873 in interest, is the guides' yardstick row for a used car.
What buyers actually put down
The yardstick and the average sit apart. Edmunds Q2 2026 data puts the average down payment on a new car at $5,815, or 11.6% of the purchase, the lowest share since the third quarter of 2020. That is well short of the 20% yardstick, and it sits beside longer loan terms and higher monthly payments in the same data.
Against current average prices, the yardstick works out like this: 20% of the average new car, $50,562 in September 2026 (Kelley Blue Book), is $10,112. 10% of the average 3-year-old used car, $32,651 in August 2026 (iSeeCars), is $3,265. The gap between the yardstick and the average is not a verdict on any buyer. It is the distance between a widely cited rule and what buyers are actually handing over.
What credit does to the same loan
The down payment is only half the loan math. The rate is the other half, and the rate follows credit. Experian's Q2 2026 averages, by credit tier on the VantageScore 4.0 scale, run from 4.41% to 16.11% on a new car and from 6.29% to 21.62% on a used car. Here is what each new-car tier rate does to the same loan, a $35,000 car with 20% down, a $28,000 loan over 60 months:
| Credit tier | Score range | New car APR | Used car APR | Monthly payment | Total interest |
|---|---|---|---|---|---|
| Super prime | 781-850 | 4.41% | 6.29% | $521 | $3,252 |
| Prime | 661-780 | 6.15% | 8.81% | $543 | $4,596 |
| Near prime | 601-660 | 9.71% | 13.93% | $591 | $7,456 |
| Subprime | 501-600 | 13.52% | 19.10% | $645 | $10,674 |
| Deep subprime | 300-500 | 16.11% | 21.62% | $683 | $12,953 |
On the same $28,000 loan, the deep subprime row costs $162 a month more than the super prime row ($683 against $521) and $9,701 more in interest over the 60 months ($12,953 against $3,252). The payment and interest columns use the new-car rate for each tier. These are averages across all loans in each tier, not quotes, and a lender that prices on a FICO score may draw the tier lines differently.
The 20/4/10 rule, in plain words
Chase publishes the same question in rule form as the 20/4/10 rule: 20% down, a loan of 4 years or less, and total monthly car costs under 10% of monthly income. Each number covers a different part of the purchase. The "20" is the down payment share of the car's price. The "4" is the loan length in years, a shorter loan means a higher monthly payment but less interest overall. The "10" is the widest of the three: it covers all monthly car costs together, payment, insurance, fuel, and upkeep, not the payment alone. For example, on $5,000 a month of income before tax, the "10" part caps all monthly car costs together at $500. The tables on this page use 60 months instead of 4 years, because 60 months is this site's usual loan length and it keeps the three down payments comparable; the "4" in the rule is the shorter-loan version of the same idea. Chase describes the rule as a guideline, not a fit for every budget.
What counts as a down payment, and what it does not cover
A down payment can be cash, the value of a trade-in, or both put together, NerdWallet counts all three the same way. A $4,800 trade-in and $4,800 in cash leave the same $43,200 loan on the $48,000 example. What the down payment does not cover is everything around the loan: sales tax (which varies by state), title and dealer fees, and the running costs of insurance, gas, and upkeep. Those sit outside the tables above, and a real total adds them back in.
What this page does not assume
Three gaps are stated here rather than papered over. First, the tables hold the APR at 8% for every row, so the only thing changing is the down payment. In real life a bigger down payment can come with a lower rate, but there is no fixed formula that turns a down payment into an exact rate cut, the rate also follows credit history and the lender, so no rate break is assumed here. Second, used-car loans often carry a higher rate than new-car loans, so a real used-car loan at a higher APR would cost more interest than the used table shows. Third, the $48,000 and $25,000 prices are published averages from 2025, not a quote for any specific car, run the same rows with the actual price for a real comparison.
A $35,000 car, worked out in full
Starting numbers, stated plainly: car price $35,000, 8% APR, 60 months to pay, loan equals price minus down payment. The calculator table above shows these numbers live at its starting settings, and the figures below are the same arithmetic, worked by hand:
- 0% down: $0 down, $35,000 loan, $710 a month, $7,580 in interest, $42,580 paid to the lender in all.
- 5% down: $1,750 down, $33,250 loan, $674 a month, $7,201 in interest, $40,451 paid to the lender in all.
- 10% down: $3,500 down, $31,500 loan, $639 a month, $6,822 in interest, $38,322 paid to the lender in all.
- 15% down: $5,250 down, $29,750 loan, $603 a month, $6,443 in interest, $36,193 paid to the lender in all.
- 20% down: $7,000 down, $28,000 loan, $568 a month, $6,064 in interest, $34,064 paid to the lender in all.
- 25% down: $8,750 down, $26,250 loan, $532 a month, $5,685 in interest, $31,935 paid to the lender in all.
Each extra 5% down is $1,750 more handed over first, and each step cuts the payment by about $35 or $36 a month and the interest by about $379. Each $1,000 more down cuts the payment by about $20 a month at these settings. From nothing down to 20% down, the payment falls by $142 a month ($710 to $568) and the interest falls by $1,516 ($7,580 to $6,064). The total paid to the lender falls by $8,516, which is the $7,000 handed over first plus the $1,516 of interest that never gets charged. Counting the down payment too, the cash outlay falls by $1,516, the interest alone, from $42,580 to $41,064.
The numbers say the same thing at every step: more money down buys a smaller loan, and a smaller loan costs less each month and less interest in total. The 20% row sits $142 a month under the 0% row and $1,516 under it in interest, with $7,000 handed over first. The 25% row goes further in the same direction, $532 a month and $5,685 in interest. Which row fits a given buyer is a question of cash on hand, not of the arithmetic, and the arithmetic runs the same way in both directions.
Calculation transparency
Jurisdiction. United States. Sales tax, titling, registration and insurance rules are set by your state, so your exact numbers depend on where you buy and register the car.
Rules and time period. The calculator and the worked example use 8% APR and 60 months unless the rate, the term, or the price is changed. The loan equals the price minus the down payment. Tax, title, dealer fees, insurance, gas, and upkeep are not included, so the figures compare down payments only. The $35,000 worked example, the $48,000 and $25,000 tables, and the credit tier table were each computed from the same loan formula and checked in node before publishing.
Scope and limitations. Educational estimate only. A bigger down payment can come with a lower rate in real life, but there is no fixed formula that turns a down payment into an exact rate cut, so no rate break is assumed here. Used-car loans often carry a higher rate than new-car loans. Get a real quote for the same car, coverage and loan before you decide.
Source links checked November 6, 2026. Figures: Edmunds Q2 2026 new-vehicle finance data; Kelley Blue Book average transaction prices (September 2026); iSeeCars average 3-year-old used car price (August 2026); Experian State of the Automotive Finance Market (Q2 2026); NerdWallet, "How Much Should My Car Down Payment Be?" (updated January 12, 2026); Chase, "The 20/4/10 Rule for Buying a Car".
Primary sources: Edmunds, new-vehicle finance data; Kelley Blue Book, September 2026 average transaction prices; iSeeCars, average 3-year-old used car price, August 2026; Experian, average car payment and loan rates; Experian, average car loan rates by credit score; J.D. Power, the 20/4/10 rule; CFPB, auto-loan shopping guidance. How the numbers are calculated is written down on the methodology page, and every source is listed on the sources page.
How to use
- Enter the vehicle price. The average new car was $50,562 in September 2026 and the average 3-year-old used car was $32,651 in August 2026, or type the price of the car in front of you.
- Set the down payment. Use the slider or type a percent. The widely cited rule is 20% on a new car and 10% on a used car, and buyers actually averaged 11.6% on a new car in Q2 2026.
- Enter the interest rate, or pick a credit tier. The Experian Q2 2026 averages are 6.35% on a new car and 11.19% on a used car. Picking a tier fills in that tier's average rate for a new or used car, not a lender quote.
- Pick the loan length. The starting length is 60 months. A shorter loan means a higher monthly payment and less interest in total.
- Read the payment, the interest, and the table. The results show the down payment, the amount financed, the monthly payment, the total interest, and the total paid, and the table shows the same car at 0% to 25% down side by side.
Formula
The down payment is the vehicle price times the down payment percent, divided by 100. The amount financed is the vehicle price minus the down payment.
The monthly rate is the APR divided by 12. The monthly payment equals the amount financed times the monthly rate times one plus the monthly rate raised to the number of months, all divided by one plus the monthly rate raised to the number of months, minus one. At 8% over 60 months the payment factor is 0.0202764, so each $1,000 borrowed costs $20.28 a month, and each $1,000 more down cuts the payment by about $20 a month at these settings.
Total interest equals the monthly payment times the number of months, minus the amount financed. Total paid equals the down payment plus the monthly payment times the number of months. Payments and interest are rounded to the nearest dollar, so a row may be off by $1 from the exact cents. Sales tax, title and dealer fees, insurance, gas, and upkeep are not in this formula.
Definitions
Down payment. The money handed over first, when the car is bought. It can be cash, the value of a trade-in, or both put together.
Amount financed. The loan, the amount borrowed. It is the vehicle price minus the down payment.
APR. Annual percentage rate, the yearly cost of borrowing, shown as a percent. Experian's Q2 2026 averages are 6.35% on a new car and 11.19% on a used car.
Loan term. The number of months the loan is paid over. The calculator starts at 60 months, five years.
Loan-to-value. The loan divided by the vehicle price. With nothing down it is 100%, with 20% down it is 80%.
Total interest. All the interest paid over the full loan, the monthly payment times the number of months minus the amount financed.
Upside down. Owing more than the car is worth. It happens when the loan balance is higher than the car's value, which a bigger down payment makes less likely from the start.
20/4/10 rule. A widely quoted benchmark: at least 20% down, a loan of no more than 4 years, and total monthly car costs under 10% of monthly income.
Credit tier. The band a credit score falls in. Experian's Q2 2026 averages run from 4.41% for super prime borrowers on a new car to 16.11% for deep subprime, and from 6.29% to 21.62% on a used car.
Questions people actually ask
How much should I put down on a car?
The two numbers most guides land on are 20% for a new car and 10% for a used car. On a $48,000 new car, 20% is $9,600. On a $25,000 used car, 10% is $2,500. The table on this page shows what 0%, 10%, and 20% down cost on the same car, so the numbers can be compared side by side.
Is 20% down required to buy a car?
No. The 20% figure for a new car and the 10% figure for a used car are common guide numbers, not a rule every lender sets. Many buyers put down less. Less money down means a bigger loan, a higher monthly payment, and more interest over the life of the loan.
Does a bigger down payment lower my monthly payment?
Yes, on the same car at the same interest rate and loan length. On the $48,000 example at 8% over 60 months, the payment is $973 a month with nothing down, $876 a month with 10% down, and $779 a month with 20% down.
What happens if I put nothing down?
With nothing down on the $48,000 example, the loan is the full $48,000, the payment is $973 a month, and the interest over 60 months is $10,396. The loan balance also starts out higher than it would with money down, which leaves more room to owe more than the car is worth if its value falls fast.
Does a trade-in count as a down payment?
Yes. A down payment can be cash, the value of a trade-in, or both put together. A $4,800 trade-in on the $48,000 example covers the same 10% as $4,800 in cash, and the loan left over is $43,200 either way.
Run your own numbers
Change the price, the down payment, and the rate to match the car in front of you, the calculator does the same loan math as the tables above. For the wider question of what price fits a budget, see how much car can I afford. For the new-versus-used side of the same choice, see new vs. used and the true cost of a used car page, and for why cars lose value the way they do, see why cars lose value.
Figures: NerdWallet, "How Much Should My Car Down Payment Be?" (updated January 12, 2026), 20% new, 10% used, average new-car price about $48,000, average used-car price past $25,000, down payment as cash, trade-in value, or both; Chase, "The 20/4/10 Rule for Buying a Car", 20% down, four years or less, monthly transportation costs under 10% of income. Loan math is this site's method: 8% APR, 60 months, payment factor 0.0202764, verified against the published Tahoe example before use. Rates, taxes, and fees vary by buyer, car, state, and lender.
Related: Beyond the down payment, see how much money you need on day one to buy a car.
Related: A small down payment can leave you upside down. See what that costs.
Related: Putting more down or paying cash? See whether to pay cash or finance.
Related: See how the down payment moves the monthly payment.