How Much Should I Put Down On A $20,000 Car?

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Automotive Content Editor

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


, Automotive Content Editor - February 15, 2022

The amount of money you put down on a vehicle comes down to your credit situation and the cost of the car, among other things. However, as a rule of thumb, you should always put down the most you can afford. Let's take a look at how much a car buyer may want to put down on a $20,000 car.

How much should I put down? When you shop for a vehicle with financing, you likely need to make a down payment in order to take delivery of your car. The amount you're required to put down can vary, especially depending on your credit situation. If you're a borrower with good credit, you may not have a set requirement, but you may still have to put down a certain amount to qualify for some financing deals.

If 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.

There's another common adage for down payments though, and it mostly holds true. If you're financing a used car, you should aim to put down at least 10%; put down 20% or more on a new car if you can. Here are some examples.

Case #1

A new 2022 Chevrolet Trax carries a suggested MSRP of $22,095. Here's how much you should put down in a few different scenarios:

  • 10% down with bad credit - $2,210
  • With 20% down - $4,419
  • With 25% down - $5,524

Case #2

A 2014 Subaru Outback carries a listing price of around $19,990. In this case, you may be able to put down lesser amounts, since the vehicle is used.

  • Minimum with bad credit - $1,000 or lender's requirement
  • With 10% down - $1,999
  • With 20% down - $3,998

Why make a down payment? Down payments are a good idea in most cases. For a lender, they may be a good way to jump-start your loan, but for a borrower, they can equal a great deal of savings. A down payment actually does a lot for you as a borrower. It can show a lender that you're willing to invest in your own success – borrowers who make a significant down payment are known to complete their loans more successfully than those who don't.

Additionally, the more you put down the less you have to borrow, and the more you can save in interest charges over the life of your loan. Also, if you can make a significant down payment, you may be able to get more favorable terms or lower interest rates on your auto loan.

When you're looking for an auto loan as a bad credit borrower it's important to understand that a down payment is always a requirement, though your amount required may vary. If you are looking for your next car but don't know where to start, we want to help at CarsDirect. Simply fill out our fast, free auto loan request form to get started.

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, Automotive Content Editor

Meghan Carbary has been writing professionally for nearly 20 years. A published journalist in three states, Meghan honed her skills as a feature writer and sports editor. She has now expanded her skill-set into the automotive industry as a content writer for Auto Credit Express, where she contributes to several automotive and auto finance blogs.


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