Dear Driving for Dollars,
I have about $8,000 in savings that I could put down on a $25,000 car loan. Should I put down all of it, or should I put down just the minimum I need to get the best interest rate?
It depends on the interest rate on your car loan and what your money can earn if you keep it in savings.
Shop around for the best interest rate on your car loan before you visit the dealer by reaching out to any banks where you currently have accounts as well as credit unions and national lenders using Bankrate’s interest rate search tool.
Next, consider which interest rate you’ll get if you invest a portion of your savings. Bankrate’s rate search tool can help with this, too. Then use the down payment calculator, entering in the full $8,000 as well as the minimum you can put down to get the interest rate you want, the car loan rate and the savings interest rate, and you will easily see which option is your best financial choice.
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