payments opinion

Chuck33079

Whatever you do, go with a shorter term. 72 months is insane.

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2011 MB Touring-Sport-6sp-Nav/GTM TT/FI TT TDX/JTran/Kosmic/Eibach/Hotchkis/SPC/CSF/RPS/SoThatsWhereAllMyMoneyWent

TerribleONE

I think a 48-60 month finance is the longest you should EVER go. Even then, its kind of pushing it!

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Chuck33079

I'd be ok with 48 assuming I could throw additional cash at the principal every month. That way you can still revert back to the original low payment amount if you hit hard times. 60+? No way.

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2011 MB Touring-Sport-6sp-Nav/GTM TT/FI TT TDX/JTran/Kosmic/Eibach/Hotchkis/SPC/CSF/RPS/SoThatsWhereAllMyMoneyWent

Gadgetech

This is called a simple interest loan. You can pay it off at anytime and making any payment over and above the amount due goes to principle.

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Upstate Z Club

Chuck33079

I've had multiple car loans where any additional amount I paid went toward the next month's payment unless otherwise instructed.

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2011 MB Touring-Sport-6sp-Nav/GTM TT/FI TT TDX/JTran/Kosmic/Eibach/Hotchkis/SPC/CSF/RPS/SoThatsWhereAllMyMoneyWent

Gadgetech

Well a lot of times too a leinholder will adjust your payment down due to your extra amount paid reducing the principle owed in an attempt to recapture as much lost interest from an early payoff as possible.

The point is that leinholders are tricky and you have to scrutinize and ask all the questions up front b/c once you have a loan with someone it's not free to change if you don't like something.

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Upstate Z Club

Frank Rizzo

that sounds like a Rule of 78 loan.....

A quick explanation of the "Rule of 78"


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synolimit

You're joking right? He paid $31,000. That's $34,910 total and only had to pay $485 a month. At 60 months he'd have to shell out $570 a month and only pay out $34,246. I'm sorry but saving only $654 over the term is not worth a $85 payment increase. And Jesus 48 is even worse!! Its $699 a month and $33,591 total. I'll eat $1319 to avoid $699 like the plague.

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13 370z-

Chuck33079

Some people would rather pay less for the car, not have the smaller payment. There's a reason there's a rule of thumb that says if you can't pay the car off in three years you can't afford the car.

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2011 MB Touring-Sport-6sp-Nav/GTM TT/FI TT TDX/JTran/Kosmic/Eibach/Hotchkis/SPC/CSF/RPS/SoThatsWhereAllMyMoneyWent

synolimit

Never heard of it and I don't know anyone that can do that. I never have a car longer then a year anyways so more money to play with the better. To each their own I guess.

I pay less incase something happens. I'm an RN, my job will NEVER go away, but I can't predict the future. If my motor goes and I need 5k cash I'd rather worry about a $400 payment coming up vs a $700 payment. You can always pay more a month to pay it off early rather than be forced to pay more each month.

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13 370z-

MMC Racing

If you bank the down payment you didn't make on the car, then you have a "rainy day fund" to pay for that hypothetical engine failure. You could also still "pay" the lower payment each month by covering the difference from tapping the "rainy day fund".

There are a number of strategies and they are highly dependent on a number of factors, but the main one is the interest rate. The higher the rate, the more making a bigger down payment makes sense.

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2014 F150 Raptor, 2014 Mazda 3, 2015 Nissan GT-R