What is a good down payment for a $25,000 car?
How much should you put down on a car? A down payment between 10 to 20 percent of the vehicle price is the general recommendation. But if you can afford a larger down payment, you can save even more money on interest payments over the life of the loan.
Average amount financed
Your down payment should be 10%-20% of the car's total cost.
| Loan Amount | Loan Term (Years) | Estimated Fixed Monthly Payment* |
|---|---|---|
| $25,000 | 5 | $501.86 |
| $30,000 | 3 | $939.95 |
| $30,000 | 5 | $614.76 |
| $35,000 | 3 | $1080.54 |
There isn't one specific score that's required to buy a car because lenders have different standards. However, the vast majority of borrowers have scores of 661 or higher.
Down payments not only help lower your monthly payments, they could also reduce your total auto loan interest. Most experts recommend a 20% down payment for new cars and 10% for used. Getting pre-approval might provide clarity on potential interest rates.
A larger down payment reduces the size of the loan you'll need to cover the cost of the car. That, in turn, brings down the lender's risk, which may make it easier for you to get approved. On top of that, putting more down may help you qualify for a lower interest rate.
NerdWallet recommends spending no more than 10% of your take-home pay on your monthly auto loan payment. So if your after-tax pay each month is $3,000, you could afford a $300 car payment.
The average credit score in the U.S. was 715 in 2024, unchanged from the 715 average in the third quarter (Q3) of 2023.
It will take 43 months to pay off $25,000 with payments of $800 per month, assuming the average credit card APR of around 18%. The time it takes to repay a balance depends on how often you make payments, how big your payments are and what the interest rate charged by the lender is.
| Loan Term (Months) | Loan Amount | Rate |
|---|---|---|
| 60 | $30000.00 | 7.44% |
| 72 | $10000.00 | 7.44% |
| $15000.00 | 7.44% | |
| $20000.00 | 7.44% |
How to raise credit score fast?
- 1. Make On-Time Payments. ...
- Pay Down Revolving Account Balances. ...
- Don't Close Your Oldest Account. ...
- Diversify the Types of Credit You Have. ...
- Limit New Credit Applications. ...
- Dispute Inaccurate Information on Your Credit Report. ...
- Become an Authorized User.
Every lender sets its own requirements for zero-down-payment deals, if they offer them at all. Generally, the credit score needed to buy a car is at least 661 whether you make a down payment or not. You could still get a car loan if your score is lower than 661, but be prepared to pay higher interest rates.
Usually, the minimum income to qualify for a loan is anywhere from $1,500 to $2,500 a month before taxes, from a single job, although the higher the better. You must bring your most recent computer-generated check stub showing year-to-date income with you when you visit the dealership to serve as proof of income.
A down payment between 10 to 20 percent of the vehicle price is the general recommendation. But if you can afford a larger down payment, you can save even more money on interest payments over the life of the loan.
An increase in your monthly payment will reduce the amount of interest charges you will pay over the repayment period and may even shorten the number of months it will take to pay off the loan.
If you have a consistent monthly income and don't mind being limited to participating dealers, Capital One may be a good choice for an auto loan. It's possible to get prequalified with a soft credit check. And the Auto Navigator tool can come in handy if you're on a tight budget.
Financial experts recommend spending no more than 10% of your monthly take-home pay on your car payment and no more than 15% to 20% on total car costs such as gas, insurance and maintenance as well as the payment. If that leaves you feeling you can afford only a beat-up jalopy, don't despair.
- You're delaying the benefits of homeownership. ...
- It could come at the expense of other financial goals. ...
- You're losing liquidity in your finances.
To qualify for a 0% APR car loan, you generally need excellent credit, a solid income and a low debt-to-income ratio. But even if you qualify, your vehicle options may be limited.
The average monthly car payment for new cars is $737, while used cars had a slightly lower payment of $520. ( Experian) 42.96 percent of vehicles financed in the third quarter of 2024 were new vehicles. Financing for used vehicles sat at 57.04 percent in the same quarter. (
How much is a $20,000 car payment a month?
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.
On average, a new car buyer with an excellent credit score can secure an average interest rate of 5.25%, but that average jumps to 15.77% for borrowers with poor credit scores. For used car buyers, those averages range from 7.13% to 21.55%, depending on the borrower's credit history.
71.3% of Americans have a FICO Score of 670 (good) or better. 21.2% have an exceptional FICO credit score of 800 or above. FICO credit scores generally increase with age, with older generations having higher averages.
Average salary in US
The average yearly salary in the US is $65,470, according to data from the Bureau of Labor Statistics. This figure represents the average wage regardless of location, occupation, gender, and other factors.
While older models of credit scores used to go as high as 900, you can no longer achieve a 900 credit score. The highest score you can receive today is 850. Anything above 800 is considered an excellent credit score.
