Score: 4.1/5 (12 votes)

Using the formula above, you can estimate your monthly payment for various loan terms to be: **12 months: $1269.25**. **24 months: $643.99**. **36 months: $435.49**.

Once you've figured how much the vehicle is going to be, **multiply it by 15-20%**. Although this is not possible for everyone, you should always aim for at least a 15-20% down payment when buying a car, the more the better.

With a three-year $10,000 loan at a 4.5% interest rate, your monthly payments would be **$297 per month** or more if you include the sales tax in the loan.

For instance, using our loan calculator, if you buy a $20,000 vehicle at 5% APR for 60 months the monthly payment would be **$377.42** and you would pay $2,645.48 in interest.

“A typical down payment is usually **between 10% and 20% of the total price**. On a $12,000 car loan, that would be between $1,200 and $2,400. When it comes to the down payment, the more you put down, the better off you will be in the long run because this reduces the amount you will pay for the car in the end.

It can't be stopped but making a large down payment gives you a cushion between the value of the car and the amount you owe on the loan. **If your loan amount is higher than the value of your vehicle, you're in a negative equity position, which can hurt your chances of using your car's value down the road**.

In general, lenders look for borrowers in the prime range or better, so you will need a score of **661 or higher** to qualify for most conventional car loans.

**The average new car payment in America has crept above the $500 per month mark for the fist time**, settling in at $503, according to a recent study by Experian. And if that weren't bad enough, the average length of a car loan now stands at 68 months.

**The larger the down payment, the lower your monthly payment will be—and you'll probably get a better interest rate, to boot**. The general rule is that your payment will drop about $20 a month for every $1,000 you put down, based on a 5% APR, but this is subject to individual situations and loan terms.

When it comes to a down payment on a new car, you should try to cover **at least 20% of the purchase price**. For a used car, a 10% down payment might do. Part of your decision will depend on where your credit score stands.

In general, you should strive to make a down payment of at least 20% of a new car's purchase price. **For used cars, try for at least 10% down**. If you can't afford the recommended amount, put down as much as you can without draining your savings or emergency funds.

PAY HALF YOUR MONTHLY PAYMENT EVERY TWO WEEKS

That adds up to 13 full payments a year, rather than 12. If you have a 60-month, $10,000 loan, you'll save only about $35 in interest, but you'll repay the loan in **54 months** rather than 60.

Having a 700 credit score puts you in the “prime” category for borrowing. According to Experian, the average rates for this category are **3.51% for new-car loans and 5.38% for used-car loans**.

Minimum Down Payment Requirements

When you're dealing with poor credit, the smallest down payment you can typically make is **10% of the vehicle's selling price or at least $1,000**.

How much should you spend on a car? If you're taking out a personal loan to pay for your car, it's a good idea to limit your car payments to between 10% and 15% of your take-home pay. **If you take home $4,000 per month, you'd want your car payment to be no more than $400 to $600**.

According to experts, a car payment is too high if the car payment is **more than 30% of your total income**. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.

When you make a really large down payment, say around 50%, you're going to see your auto loan really change for the better. **Making a down payment as large as 50%t not only improves your chances for car loan approval, it also:** **Reduces interest charges**. **Gives you a much smaller monthly payment**.

In terms of the best time of the year, **October, November and December** are safe bets. Car dealerships have sales quotas, which typically break down into yearly, quarterly and monthly sales goals. All three goals begin to come together late in the year.

The average monthly car payment was **$644 for a new vehicle and $488 for used vehicles** in the U.S. during the fourth quarter of 2021, according to Experian data. The average lease payment was $531 a month in the same period.

If you're in the market for a new car, you might be asking yourself — how much is the average car payment? Experian reports that, as of the second quarter of 2020, new vehicle owners paid an average of **$568 a month** on their vehicles, while used car owners paid $397.

The average monthly car payment for **new cars is $648**. The average monthly car payment for used cars is $503.

The recommended credit score needed to buy a car is **660 and above**. This will typically guarantee interest rates under 6%.

Does Applying for a Car Loan Affect Credit? The credit experts at Experian tell us that when you apply for loans to shop for the best rate, each lender you apply with will request a credit check that causes a hard inquiry to be entered on your credit report. This **typically causes a small reduction in your credit score**.

FICO Auto Score has several versions. Most auto lenders use **FICO Auto Score 8**, as the most widespread, or FICO Auto Score 9. It's the most recent and used by all three bureaus. FICO Auto Score ranges from 250 to 900, meaning your FICO score will differ from your FICO Auto Score.

Not only might you need to have a decent-to-good credit score to secure a no-money-down loan, but having a good credit score (**at least 680 points**) is also the best way to prevent a lender from increasing the interest rate they would've given you on a conventional loan.