How Much Should I Put Down On A $10,000 Car?

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Sarah is a Michigan native with a background in Communication and Creative Writing from Eastern Michigan University. Outside of publishing articles for CarsDirect and its sister site, Auto Credit Express, Sarah has a strong passion for literature, editing, and writing.


, Contributing Writer - July 1, 2022

If you’re on a budget and shopping for your next car, you may be wondering how much of a down payment you’re expected to make. The answer can vary depending on several factors: the car’s selling price, which lender you’re working with, and your credit situation. For those shopping for a car in the $10,000 range, let’s see what kind of down payment you’d be looking at paying.

Why Make A Down Payment?

You may be wondering what purpose a down payment serves. For starters, down payments can be a requirement if you’re taking out an auto loan. Depending on the lender, there may be a minimum down payment you’d be required to pay. This is especially true if you’re a bad credit borrower with a credit score of 670 or lower.

If you have poor credit, a down payment is always a stipulation of the loan agreement, though the minimum amount may vary. Down payments can be a positive sign to lenders that you are confident in your ability to pay a loan off, and those who make larger down payments are known to complete their loans more than those who don’t. Even if you have good credit, a down payment may be needed to take delivery of your car, though stipulations for good credit borrowers will likely be more lenient.

Aside from necessity, making a down payment can have several benefits. They can be useful in stopping your vehicle from going into negativity equity or removing it from negative equity. If you make a sizable down payment, not only do you end up saving more money by the end of the loan, you can end up receiving better interest rates or a better loan term. Down payments don’t have to be made entirely in cash either, as you can use trade-in value to cover the amount.

How Much is a Good Down Payment?

Typically, down payments consist of paying $1,000 or 10% of the vehicle’s selling price if you're a bad credit borrower. The standard recommendation is to put down 10% for a used car, and 20% of the vehicle’s selling price for a new car. These aren’t set-in-stone rules, however, and it’s recommended that consumers give as big a down payment as they can feasibly afford in order to save money in the long run. The more you put down, the less you have to borrow.

Can I Find a Car for $10,000?

Because of rising costs all across the automotive industry, there’s one very important thing for shoppers to keep in mind. Finding a car at this price point will be extremely difficult. Both new car and used car prices have been on the rise with the supply shortages, and they don’t appear to be dropping any time soon. So, in order to find a car closer to the $10,000 price range, you will likely have to do some research and the car will likely have to be a used one.

Here are some examples from California that we found, along with how much you might want to put as a down payment for them.

Considering that a used car is your best chance of finding a car at this price point, you could get away with only putting 10% or the lender’s minimum requirement down. However, it is still encouraged that consumers put as much money into the down payment as they can afford in order to reduce how much they pay in interest charges later on.

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, Contributing Writer

Sarah is a Michigan native with a background in Communication and Creative Writing from Eastern Michigan University. Outside of publishing articles for CarsDirect and its sister site, Auto Credit Express, Sarah has a strong passion for literature, editing, and writing.


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