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    Should I put 10 or 15k down on a new car?

    I'm stuck between putting 10 or 15k down on a new car. They're offering 1.9% APR currently.

    10k down puts me at a payment of 507/month, and 15k puts me at 420/month (60 month loan)

    If I put 10k down that leaves me with ~15k in my HYSA, which I'll probably invest. Come spring I'll also be selling my motorcycle (worth 10-11k) so I can use that to pay down some of the loan.

    What would be the best choice??

    Should I put 10 or 15k down on a new car?
    byu/Significant-Word7679 inpersonalfinance



    Posted by Significant-Word7679

    View 26 Comments

    26 Comments

    2. Sad-Celebration-7542 on

      1.9% is so cheap. Put the absolute minimum down and use the rest to build savings, pay down more expensive debt, etc.

    3. gavmcd on

      Do you have an adequate emergency fund? With that low of an interest rate I would put less down. You can easily earn > 1.9% risk free.

    4. No-Detective2391 on

      That 1.9% is pretty solid, I’d probably go with the 10k down and invest the extra 5k since you can likely beat that rate in the market. Plus having more liquidity never hurts and you’ve got that bike money coming in spring anyway

    5. AvGeekExplorer on

      How big is your emergency fund? The way this is written makes it sound like you’ve got 25k in a HYSA. If that’s your emergency fund you shouldn’t be “investing” it? It should remain liquid.

    7. KaleidoscopeAble4958 on

      Don’t judge affordability of a vehicle based on the payment. It’s affordable or not and a good deal or not based on the total price and the total cost of ownership. 60 months is a long time to make payments just to make it seem affordable.

    8. GeekoHog on

      I was in the same situation last year and I put more down to lower the payment. I get it the interest rate is low so you have to decide for your situation.

    9. OkMarsupial on

      I don’t want to do the math, but it really sounds like you’re spending too much on the car. Put $1k down and by a 50% cheaper car.

    11. JerrySenderson69 on

      Some really nice used cars on the market for $15k. Pay cash for a low miles vehicle that has already depreciated.

    14. Few_Dragonfly3000 on

      You could buy a nice used car and then hire a mechanic to fix the entire thing for that much.

    15. SharkyTheCar on

      A consideration for zero is if it gets wrecked a good chunk of that down payment is gone with depreciation. If it gets wrecked with nothing down gap coverage pays it.

    16. corrupt_poodle on

      With 1.9% interest put the minimum down to have whatever payments you feel you can sustain and put the rest in a HYSA.

      Rates today are around 3.4%, so when you sell your motorcycle put it in savings not against your loan, in a HYSA you’ll be earning 1.5% per month – free money. No reason to pay off a loan like that early.

    18. pushing-rope on

      15K and 48 months if you can. I get real tired of having that loan in the 4th 5th years. Also where are you getting that rate?!

    20. gentlebrun3ss on

      Putting 10k down is the smarter financial move because of that 1.9% rate. Most high yield savings accounts are paying around 4% or 5% right now. You are essentially making a 2% to 3% profit just by keeping your cash in the bank instead of giving it to the dealership.Keeping that extra 5k in your HYSA gives you a bigger safety net for emergencies or unexpected repairs.

    23. Geedis2020 on

      I’d put down as little as possible and keep as much money as possible in your HYSA. If you’re getting 3.5-4% in that account you’re beating the interest rate a lot by having that money work for you.

    25. Mak333 on

      Copilot:
      *If you invested* ***$5,000*** *in the S&P 500 on* ***December 21, 2020****, it would be worth approximately:*

      ***💰 $9,245 today***

      *That’s about an* ***84.9% total return*** *over the period — not including dividends. If we added dividend reinvestment, the number would be a bit higher.*

    26. zwazwaland on

      Hey OP, new to cars so a quick question – Did you get 1.9% from your bank or the dealer financing the car? Wondering where I’ll get a better rate.

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