Cash, personal checks, debit cards, credit cards, and trade-ins are all acceptable forms of a down payment for a car. Most dealerships will work with you to get a down payment that works for your budget.

Cash, personal checks, and debit cards are typically preferred for down payments, although there are times when a credit card may be wiser.
A large down payment can help you get lower monthly payments and less interest on your loan payments.
If you don’t have the money on hand to make a down payment, some lenders will also take credit cards or let you trade in a vehicle.

Acceptable forms of down payment

A down payment is an upfront payment on a

car loan

that improves your chances of getting approval from a lender. In general, most car dealerships accept:

Cash: Always get a receipt to prove the amount you put down. Cash is often preferred because it shows that you’re serious about making an offer and reduces the amount you’ll have to finance to get the car.

Check or debit card: This option automatically generates a paper trail and appears on your bank statements.

Credit card: This isn’t a great option because most lenders charge high interest rates, and you’ll probably be charging the card a hefty sum.

Trade-in: Some dealerships let you swap your old vehicle for an agreed-upon amount of money that acts as the down payment for the new car you want.

Before you head to the car dealership, give them a quick call to find out what forms of down payment they accept. If you want to be one step ahead, call your bank or credit union to learn about your financing options as well.

How much to put down for a car down payment

Typically, 20% of the purchase price is considered an average down payment on a new car. This amount basically pays off the car’s first year of depreciation—but you don’t have to give this amount if you can’t afford it.

If you’re financing a used car, you probably only have to put down around 10% because the used car’s value depreciates slower. In any case, try to put down as much as you can comfortably afford.

The more money you put down, the less money you have to borrow with a loan. Not only will this make your monthly payments cheaper, but you’re also more likely to get approved for financing if you put down a larger down payment.

Why you shouldn’t use a credit card for a down payment

Paying with cash or a debit card is usually better than using your credit card since it’s money you have in hand (or in your bank account) rather than a line of credit.

Also, credit card interest rates are generally higher than auto loan rates, so you’ll end up paying higher credit card interest charges than the loan is worth.

Depending on your credit card, you might max out your credit limit, too, which can negatively affect your credit score. Bad credit can make it harder to gain approval for future loans.

Some credit cards even have a daily spending limit that can prevent you from putting the down payment amount on your card—so if you’re thinking about paying this way, make sure to check in with your credit card company first.

The exception to using your credit card for a down payment is if you plan to pay off your credit card immediately. Charging your down payment makes sense if you earn credit card rewards like travel points or cash back.

What to bring if you’re trading in a car

Borrowers need to bring your certificate of title, also called the pink slip, for your vehicle to prove that you’re the owner. If you haven’t paid off the car yet, get the co-signer or lienholder to sign off on the title.

Have the account number for your unpaid trade-in available, too. You can find it on one of your statements or under your account information if you make online payments.

It doesn’t hurt to call your current lender and explain that you’re trading in the vehicle, either. They might be able to smoothly transfer the information to the dealership or facilitate your new financing.

You’ll need to dig out your current vehicle registration, as well. If you don’t have it, contact your local Department of Motor Vehicles (DMV) and request it—and if you’re not up-to-date, pay to update the tags so you’re good to go.

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FAQs

Can you get a car with no down payment?

It’s possible to get a car without making a down payment, but you might not get as great of a financing deal—and you’ll likely have a higher interest rate on your loan.

There are exceptions, however. You might be able to get a car with no down payment if you’ve got fantastic credit and the dealership is offering a special deal.

How can I improve my chances of financing approval?

If you don’t have great credit or your down payment is smaller than you’d like it to be, ask a relative or close friend to co-sign for the loan. Having a co-signer can help you qualify for or secure a lower interest rate.

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