Timeline for A little advice please...car loan related
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4 events
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| Dec 13, 2016 at 21:08 | comment | added | Eric | This is what I did, but it still gives you higher monthly payments than a larger up front down payment. Paying extra on the loan just pays it off faster. | |
| Dec 13, 2016 at 21:05 | comment | added | user | @Eric In such a situation, you could always ask if there are any prepayment penalties or anything like that. If there aren't, accept whatever offer gets you the lowest interest rate, then put the money you didn't put as down payment towards the loan immediately (or when you get the first bill). I was in a situation of needing to finance my current vehicle when I bought it, and one of the questions I very specifically asked was if there were any prepayment penalties attached to the loan. There weren't, and I paid off the loan about a year early (on a five year original term). | |
| Aug 30, 2016 at 19:00 | comment | added | Eric | For an auto loan, a higher down payment will not always lead to a lower interest rate. I bought a new vehicle and, after agreeing the final sale price, I discussed down payment options with the finance manager afterwards. They had some financing promotion going on that resulted in a lower interest rate (and lower total interest paid) that I could only take advantage of by paying a lower downpayment than I originally had in mind. WIth simple interest, though, a higher down payment WILL lead to lower monthly payments assuming the interest rate does not vary. | |
| Aug 30, 2016 at 2:37 | history | answered | BobbyScon | CC BY-SA 3.0 |