Financing basics · Broker Black education

Why put money down?

A common guideline is about 10% down on a used vehicle and up to 20% on a new one, but the real answer is: enough to cover the taxes and fees and keep your loan-to-value in healthy territory. Every dollar down works for you four different ways.

What your down payment actually does.

Why some deals need a down payment.

Because every lender caps how much of a deal it will finance relative to the vehicle's value, some combinations simply do not work at zero down: the numbers land outside lender parameters. Adding down payment or trade equity is usually the fix, and it is exactly what a Broker Black quote will tell you when a combination will not fly.

Trade-in equity counts the same as cash here. If your trade is worth more than you owe on it, that difference is a down payment you already own. Check yours with our trade-in estimator.

Zero-down deals exist, especially with strong credit on new vehicles. Just know what you are choosing: a higher payment, a higher rate band, and more time upside down.

Quick answers.

Is 10% down enough for a used car?

Often, yes: on many deals it roughly covers taxes and fees so you are financing about the price of the car. More helps, especially on longer terms or older vehicles.

Can my trade-in be my down payment?

Yes. Positive equity in a trade (value above payoff) works exactly like cash down. In many states it also reduces the sales tax you pay; see our trade-in tax guide.

Should I put everything I have down?

Keep an emergency cushion. A slightly larger loan beats being cash-broke the week after buying, especially since most auto loans let you pay extra principal any time.

See your payment on live inventory Ask the Concierge