<prompt> Human: I have about 10k I can put down for down payment, meaning Ill have to get a loan for about 7k give or take for the car Im looking at. When my dealer filled out my paperwork for pre qualification, he insisted on putting the down payment amount at 3000 and finance the rest. This seems really sketchy to me even though I didnt argue him on that at the moment since I wasnt actually applying for a loan. My uneducated guess would be to get me on interest rates? What trick is this and how do I approach this?  <response>: Dont do it. Hes most likely wanting to put 3K down because he gets a larger incentive for bigger loan dollar amount.And yes, while you could pay a large chunk towards your principal right away, I do not recommend doing this for two major reason. The institution providing the lien could have a pre-payment penalty. However, even if they dont have a pre-payment penalty, an auto loan is not like a mortgage. Paying off a large chunk of your principal in no way effects your payments, it just allows you to finish paying off the loan faster. So even though you have a 7,000 balance, your monthly payments will still reflect a 14,000 dollar loan.Your downpayment will be the difference between a 252 dollar monthly payment or 126 dollars. 