How it works
The target percentage applies to the vehicle price before financed fees. Positive trade equity counts toward the target; negative equity increases the cash required to reach the same net contribution. Enter the full agreed trade allowance and the lender's payoff separately so the remaining debt is visible.
The calculator compares target cash with savings left after your chosen reserve. It then estimates a loan using that target down payment, even when a funding gap exists. The loan result describes a hypothetical funded target, not proof that you have enough cash or that a lender will approve it. All entered taxes and fees are assumed financed, so costs paid separately need their own cash budget.
The formula behind the estimate
Every result starts with a defined model and visible assumptions.
Target net contribution = vehicle price × selected percentage ÷ 100 Trade equity = trade allowance − existing loan payoff Cash needed = max(0, target net contribution − trade equity) Cash available = max(0, savings − reserve) Funding gap = max(0, cash needed − cash available) Amount financed = max(0, price + financed fees + payoff − trade allowance − cash down)
A worked example
For a hypothetical 20,000 car and 20% target, the target contribution is 4,000. An 8,000 trade allowance less 5,000 payoff supplies 3,000 of equity, leaving 1,000 cash needed. With 1,500 financed fees, the loan principal is 17,500. If savings are 6,000 and your reserve is 2,000, 4,000 is available for the target and there is no cash funding gap.
A target percentage is a planning choice
The comparison table uses 10%, 20% and 30% targets to show how the same trade and fees change cash and financing. No percentage is a universal lender requirement or a guarantee of affordability. A larger contribution reduces borrowing when all other terms match, but may leave too little savings for repairs, insurance or essential spending.
Keep cash and trade equity separate
Positive equity can cover the whole target, in which case target cash is zero. Any equity beyond the total purchase can leave unallocated credit that must be settled with the seller. Negative equity is debt; this model adds enough target cash to cover that shortfall before reaching the selected net contribution. The purchase-loan calculator can instead show what happens if you choose to roll that shortfall into financing.
Use your local purchase quote
Currency selection changes labels and formatting without converting numbers or assigning a tax rate. Use the same currency for savings, price, trade allowance and payoff. Fees, lender rules and contract structures vary across countries; enter verified charges and a conventional monthly loan rate for the payment illustration.
Questions worth asking
Is 20% down required?
No. It is one comparison target. Actual lender requirements and your household cash needs determine what is suitable.
Can a trade-in cover my down payment?
Positive equity can contribute. Subtract the existing loan payoff from the agreed allowance; the full trade allowance is not spendable equity.
What happens with negative equity?
This target model increases required cash by the trade shortfall. Use the purchase-loan calculator to explore financing the shortfall instead.
Does the payment result mean I can afford the target?
No. Review the funding gap and reserve first. The loan result assumes the target cash is paid and does not assess income or lender approval.
Are taxes automatically calculated?
No. Enter verified financed taxes and fees for your location. Amounts paid upfront require additional cash outside this model.
This is general information, not personalized financial advice. Read the limitations.
