How does a down payment affect my auto loan?
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A down payment is an initial, upfront payment you make towards the total cost of the vehicle. It could lower the amount that you’ll need to finance.
Your down payment could be cash, the net proceeds from trading in a vehicle, or both. The more you put down, the less you’ll need to borrow. A larger down payment may reduce the interest rate charged on the loan.
If you have an unpaid balance on the trade-in car, a portion of the down payment may also be used to satisfy the balance of that car loan.
Learn about the other factors that may impact how much you need to borrow