What is a down payment and how does it impact my loan?

A down payment on a car is a percentage of the vehicle’s total cost that you pay at the time of purchase. The size of the down payment affects almost every aspect of the loan, such as the interest rate you’ll pay, the amount of your monthly payment, and the length of the loan. The larger a down payment, the more favorable the rest of the loan terms will be. This means that you will pay less for your car during the life of the loan than if you had made a smaller down payment.