Should I put 50% down on a car loan?

"Is a 50% down payment too much for a car loan? I want to buy a $32,000 vehicle and I have 50% to put down. I've heard different things about how much you should put down on a car loan."

“A 50% downpayment on a car loan is extremely rare. Most people put a maximum of 20% down for various reasons. It might be all they can afford, but there’s more at play.
There are upsides to putting 50% down:
  • reduce the interest you pay
  • lower your monthly payment
  • avoid negative equity
However, it also has some downsides:
  • it won’t reduce your interest rate
  • it will cut into your savings exponentially
If you can afford having a $16,000 debit from your savings, go for it. Otherwise, putting 20% down will give you far more liquid funds and might only cost you a few hundred bucks in interest over the life of the loan.”
Eric Schad
Answered on Jul 28, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.

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