Car Down Payment Calculator to
Calculate Amounts from Percentages

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Help you to see how the more you save up to make a larger down payment, the more frugal you will be when making your car buying decision.

This free online Car Down Payment Calculator will calculate the down payment dollar amount from a percentage of a vehicle's purchase price, and it will compute the resulting loan amount, monthly installment, and interest costs.

Plus, the car down payment calculator will also allow you to compare the loan amount, monthly installment, and interest costs against 3 incrementally higher amounts paid down on the car.

What is a Down Payment?

In case you are new to the concept of using a loan to purchase large ticket items, a down payment is an amount of cash you would give to a lender in order to reduce the amount of money you need to borrow to make the purchase.

In the case of borrowing to purchase a car, there are a couple of reasons why a lender might require a down payment.

First, it shows the lender that you are capable of earning a wage and have displayed self-discipline in saving some of your earnings instead of spending everything you earn.

Secondly, the down payment will insure the lender against taking a loss should you default on the auto loan. This is especially true when buying a new car.

When you purchase a "new" car it instantaneously becomes a "used" car -- in which case the perceived value of the car to others drops significantly (as much as 20%).

This means that if you were to purchase a new car with zero down payment, and then default on the loan after only making a handful of monthly payments, the lender would not be able to sell the repossessed car for as much as you owed them for it.

By requiring a 20% cash down payment on new cars, lenders lower their risk of losing money on car loans that go into default.

How Borrowing Money Undermines Good Decision Making

If every day for the past 5 years you had to cut back on spending for things, activities, and events that you would have liked to spend money on, for the purpose of saving up $25,000 to pay cash for a new car, how eager would you be to hand that $25,000 in cash over to the car dealer?

Would you be more apprehensive and cautious when spending $25,000 in cash than you would if you were signing papers for a $25,000 loan?

Well, if you're like the rest of us, you probably find it much easier to sign loan papers than to part ways with a large chunk of cash. That's because we are painfully aware of the hard work and sacrifice that went into earning and saving up cash.

When taking out a loan we can't assign any value to the money we are borrowing because we haven't had to do the hard work and make the sacrifices for it yet. That's what makes easy access to credit so dangerous, because it appears to be the path of least resistance. In reality, it's not -- because you have to work and sacrifice to pay back what you borrow ... plus interest!

The "Act as if ..." Principle

If you haven't been scrimping and sacrificing wants for the past 5 years in order to pay cash for a vehicle, but you are in dire need of reliable transportation, then you probably have no choice but to borrow money to purchase a car. But that still shouldn't stop you from finding the best car with the lowest price and ownership costs.

Somehow you have got to approach this purchase as if you had been scrimping and sacrificing for the past 5 years. You've got force yourself to do the same painstaking research and deal shopping as if you are actually paying for the car out of your savings account. Otherwise you're probably going to end up spending more than you would on more car than you are willing to work and sacrifice for.

Larger Down Payment in Your Best "Interest"

I created the car down payment calculator to help you to see how much interest you could save just by putting off your car buying decision for as long as you can, if only for the purpose of being able to put more money down on the vehicle purchase. Because the larger the down payment you can make, the less you will you will have to pay out (work and sacrifice) for interest charges.

Obviously, if your present vehicle is on its death bed, then waiting may not be an option. If that's the case, I urge you to begin scrimping and sacrificing now so that the next time you are in dire need for a vehicle, not only will you be able to make a much larger down payment, but parting with cash won't undermine your natural problem solving abilities like simply signing your name on the loan application will. In other words, you will probably make a much better, more informed, more self-supporting car buying decision.

With that, let's use the Car Down Payment Calculator to calculate the dollar amount you will pay down on a vehicle purchase based on a percentage of the purchase price.

Calculate Car Down Payment Comparison
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Instructions: Enter the purchase price of the vehicle, the annual interest rate percentage, and the number of monthly payments.

Next enter the down payment percentage you would like to calculate and select the percentage you would like the comparison to increment by, then click the "Calculate Car Down Payment Comparison" button.

Mouse over the blue question marks for a further explanation of each entry field. More in-depth explanations can be found in the glossary of terms located beneath the Car Down Payment Calculator.

Help Automobile purchase price ($):
Help Automobile loan interest rate (%):
Help Loan term in months (#):
Help Starting down payment percentage rate (%):
Help Increment down payment percentage by:
Comparison % Down % Down % Down % Down
Help Down pmt:
Help Loan amt:
Help Payment:
Help Total:
Help Interest:
Help Savings:

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Car Down Payment Calculator Glossary of Terms

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Calculator Entry Fields

Vehicle purchase price: The purchase price of the automobile.

Vehicle loan interest rate: The annual interest rate percentage you will be charged by the auto finance company. Enter as a percentage (for .08, enter 8%).

Loan term in months: The term of the loan in number of months. Common loan terms are 36, 48, and 60 months.

Starting down payment percentage rate: The down payment percentage you would like the car down payment calculator to calculate the down payment amount for.

Increment down payment percentage by: Select the percentage you would like the car down payment calculator to increment the starting down payment percentage by for each of the other three comparison columns.

Calculator Result Rows

Down pmt: This row contains the amount of money that will be paid down on the vehicle purchase for each percentage displayed at the top of the columns.

Loan amt: This row contains the loan amount for each percentage displayed at the top of the columns. The loan amount is calculated by subtracting the amount paid down on the vehicle from the purchase price.

Payment: This row contains the monthly installment for each percentage column.

Total: This row contains the total of all payments for each down payment percentage column. The totals do not include the amount paid down on the auto purchase.

Interest: This row contains the interest cost of each down payment percentage column.

Savings: This row contains the interest cost savings that would occur when choosing the down payment percentages that are higher than the first column. Since the first column is always the maximum interest cost, it will always be zero.

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