What is the amount of money paid for a car at the time of purchase called?

The amount of money paid for a car at the time of purchase is referred to as the down payment. This initial payment is typically made upfront and serves to reduce the overall loan amount needed to finance the vehicle. The down payment can establish equity in the car from the start and often helps to lower monthly payments.

In contrast, a monthly payment refers to the recurring payments made on a financing agreement after the down payment has been made. The principal amount often refers to the main part of a loan that must be repaid, excluding interest, and closing costs are associated with various fees and expenses incurred during the finalization of a loan or property purchase, not applicable in this case. Thus, understanding that the down payment is a specific, upfront contribution to the vehicle's overall price helps clarify its importance in the purchasing process.