Updated June 17, 2026
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Most financial advisers recommend putting down at least 20% on a new car and 10% on a used car. A 20% down payment on a $35,000 car is $7,000. It is not required, but it meaningfully lowers payments, reduces total interest, and keeps you above water on the loan as the car depreciates.
Why 20% is the target for new cars
New cars depreciate roughly 20% in the first year. A 20% down payment means you are not immediately underwater (owing more than the car is worth) if you need to sell or the car is totaled. If you put down less and need to sell early, you may owe more than the car brings in.
Is $5,000 a good down payment on a car?
On a $25,000 car, $5,000 is 20% and a solid down payment. On a $35,000 car, $5,000 is about 14%, which helps but may leave you slightly underwater for the first year or two. Whether it is "good" depends on the vehicle price and your total loan situation.
What is a good down payment on a $30,000 vehicle?
The 20% guideline points to $6,000. With $6,000 down on a $30,000 car at 7% for 60 months, the loan is $24,000 and the monthly payment is about $475. Less down means a higher payment and more total interest paid.
Is $2,000 a good down payment?
On most new cars, $2,000 is less than 10% and does not keep pace with first-year depreciation. It helps compared to zero down, but you will likely be underwater on the loan for the first 12-24 months. Adding $2,000-3,000 more substantially improves your position. See also total cost of car ownership and how much car you can afford.
Try the Car Payment Calculator
Enter your price, down payment, trade-in, tax rate, and loan term to see your exact monthly payment before you visit the lot.