 TITLE: How Do Down Payments Work? CONTENT: What Is a Good Down Payment on a Car?\n-------------------------------------\nAuto lenders typically require lower down payments than mortgage lenders do, with car loan down payments of 10% being fairly common. While lower down payments may be possible, there are good reasons to make a down payment that covers more than 10% of a car's value, not least of which is that a larger down payment generally means lower monthly payments on your loan:\n*   Beware of loan offers, particularly on new cars, that trade off a lower down payment for a longer repayment period. Stretching a loan out from a standard four-year or even a five-year repayment period to six years offers lower monthly payments but also adds significantly to the overall cost of the car.\n*   On most new vehicles, which quickly lose resale value in their first year or two on the road, a down payment of less than 10% and an extended loan term can increase the likelihood you'll end up \"underwater\" on your loan—that is, owing more than the car is worth. END