That would depend upon a few factors, including your negotiated interest rate, taxes and other fees, the re-sale value of your car, and any rebates that come with the car. As a general rule, my credit union loan department advises a 20% down payment to avoid long-term negative equity.
According to my licensed Certified Public Accountant wife, the only appropriate down payment on a depreciating asset such as a vehicle is 100%.
You're Asian... how come you didn't do the math?... I can say this cause I am Asian, too...
Yes and NO. The real answer is it depends. Yes the asset is depreciating but one needs it a firm or a family and therefore it must be purchased or leased. In a lease the whole lease payment is written off as expense, no depreciation etc to worry about. Under special tax consideration the whole purchase or major portion could be written off then buy we must. Now cash or charge depends on the real cost of money. If the manuf is offering zero percent then its like why tie up your money in the deal. There is a fly in the ointment generally as the manuf will offer a cash discount if you don't take the zero percent and there in one has to judge if its more valuable to the company or family to sacrifice the few bucks of discount for the "free money". As to gap insurance the car depreciates a horrendous 20 percent or more when driven off the lot and so if you wreck it the insurance co will only give you 80 percent or less while the full cost would be on your head because the car got wrecked on the way home on it maiden voyage!! LIberty insurance offers this gap policy at no cost!!! so they will pay you the full value. A friend purchased a vehicle on way home the brand new buggy was splashed by a mud puddle so a detour to the car wash just up the road from the house. Trying to sneak the buggy into the garage to surprise the spouse and in the excitement the buggy went through the wall at the end of the garage right into the house YEA the wife was surprised alright but all was good as there was gap insurance to get a new one. Dealer was really really happy to sell two instead of one too.
My comment was in regard to a vehicle obtained for personal, and not business, use.
