How Much Down Payment Should I Make on a Car?

The down payment is the first major financial decision in your car buying journey. Get it right, and you'll save lakhs in interest. Get it wrong, and you'll be trapped in a high-EMI, high-interest loan.

Bank Requirements

Most Indian banks finance 80–90% of the car's on-road price. This means you must pay at least 10–20% as a down payment. However, just because the bank allows a 10% down payment doesn't mean it's the smartest choice.

Recommended Down Payment

Financial experts recommend 20–30% down payment as the optimal range. A 20% down payment on a ₹10 lakh car means ₹2 lakh upfront, resulting in an ₹8 lakh loan — keeping your EMI manageable while minimizing interest.

The Cost of a Low Down Payment

On a ₹12 lakh car at 9% for 5 years, the difference between 10% and 30% down payment is over ₹46,000 in total interest saved — and a lower monthly EMI commitment.