Share your insights or perspective on the financial matter presented in the input.

Optimal down payment amount
The optimal down payment is 100%. The only way you would do anything else when you have the cash to buy it outright is to invest the remaining money to get a better return.  When you compare investments, you need to take risk into account as well.  When you make loan payments, you are getting a risk free return.  You can't find a risk-free investment that pays as much as your car loan will be.  If you think you can "game the system" by taking a 0% loan, then you will end up paying more for the car, since the financing is baked into the sales [price in those cases (there is no such thing as free money).  If you pay cash, you have much more bargaining power.   Buy the car outright (negotiating as hard as you can), start saving what you would have been making as a car payment as an emergency fund, and you'll be ahead of the game. For the inflation hedge - you need to find investments that act as an inflation hedge - taking a loan does not "hedge" against inflation since you'll still be paying interest regardless of the inflation rate.  The fact that you'll be paying slightly less interest (in "real" terms) does not make it a hedge. To answer the actual question, if your "reinvestment rate" (the return you can get from investing the "borrowed" cash) is less than the interest rate, then the more you put down, the greater your present value (PV). If your reinvestment rate is less than the interest rate, then the less you put down the better (not including risk).  When you incorporate risk, though, the additional return is probably not worth the risk. So there is no "optimal" down payment in between those mathematically - it will depend on how much liquid cash you need (knowing that every dollar that you borrow is costing you interest).