Make sure the extra amount gets applied to the principal and not the interest.
Tell us about your auto loan...
- Thread starter Corollaman
- Start date
Current fleet of 5 vehicles are all paid/owned. However, here were the loans on the most recent purchased new.
'18 VW Altas - 6 years @ ~4.5% w/$15K down VW Credit - payment was about $500 I believe on an OTD of ~$44K so ~$30K loan. Paid it off in the first year. Took crappy dealer loan to get best OTD price knowing I would either pay it off or re-fi to my credit union with better terms. First dealer loan ever on this one.
'18 VW Golf Sportwagen - 5 years @ ~4.5% w/$8K down local bank - payment was about $300 I believe on an OTD of ~$20K so ~$13K loan. Paid if off in the first year. Took crappy dealer loan to get best OTD price knowing I would either pay it off or re-fi to my credit union with better terms. Second dealer loan ever on this one.
My buying history was always to get my own financing at my bank/credit union but the last two above I played the game a bit and ended up with a lower total OTD/total cost scenario with crappier loans. I also never trade in cars. My bank would have been in around 2% for both of these for 5-6 year loans. As always, do the math. The little bit of extra interest I paid over the first year of the loans didn't overcome the lower OTD price I got for doing it this way. Car dealers' margins are low on new cars so they make it back in finance office. Basically they dropped the OTD price about 1-2K for me taking the loans b/c they get some kick-back which is fine to me. Just know the game and how it's played.
'18 VW Altas - 6 years @ ~4.5% w/$15K down VW Credit - payment was about $500 I believe on an OTD of ~$44K so ~$30K loan. Paid it off in the first year. Took crappy dealer loan to get best OTD price knowing I would either pay it off or re-fi to my credit union with better terms. First dealer loan ever on this one.
'18 VW Golf Sportwagen - 5 years @ ~4.5% w/$8K down local bank - payment was about $300 I believe on an OTD of ~$20K so ~$13K loan. Paid if off in the first year. Took crappy dealer loan to get best OTD price knowing I would either pay it off or re-fi to my credit union with better terms. Second dealer loan ever on this one.
My buying history was always to get my own financing at my bank/credit union but the last two above I played the game a bit and ended up with a lower total OTD/total cost scenario with crappier loans. I also never trade in cars. My bank would have been in around 2% for both of these for 5-6 year loans. As always, do the math. The little bit of extra interest I paid over the first year of the loans didn't overcome the lower OTD price I got for doing it this way. Car dealers' margins are low on new cars so they make it back in finance office. Basically they dropped the OTD price about 1-2K for me taking the loans b/c they get some kick-back which is fine to me. Just know the game and how it's played.
That's it - some folks just look purely at a payment and if they can trade-up and continue the same or lower payment, they think they are winning regardless of the overall balance sheet approach of looking at it in a net-worth type way.
- Joined
- Oct 9, 2018
- Messages
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Walked into VW dealership after negotiating price on my 2019 Jetta. Brought with me an aluminum briefcase. Inside of it was a check from my Credit Union for the OTD price. I wore sunglasses and walked with authority to the finance guy's office. Slapped the briefcase onto his desk, clicked it open, spun it around, opened it... and there was the check. I made him grab it. I paid off the loan in about 8 months.
Nobody thought it was funny.
Nobody thought it was funny.
ls1mike
$50 Site Donor 2024
No, but I like to keep any car payment under 500 a month I made an exception for the truck. I financed 21,000 on the truck back in July of 19. I pay 600 bucks a month and I will have it paid off in under 4 years. Interest 2.89 % through USAA. All my other stuff is paid for, including the travel trailer. The only really big bill I have is my mortgage.
ls1mike
$50 Site Donor 2024
Kids burn that money up. LOL. My daughter goes to a private school, 700 bucks a month. She needs the small class size, but the wife and I each put 10 percent of our pay checks into TSP and we have separate savings/retirement we put additional money into. Plus both kids have college funds. Remains to be seen if they will use them.
Less than 2% for 48 months. Free money and essentially zero risk as it was coupled with gap insurance.
I have had three trucks in the last 10 years. This has been mentioned before, once you are in the truck market, with crazy high resale values-it's easier to trade up to a nicer, newer model. Of course COVID has turned the market upside down, but normally you wait for "Truck Month" when you could get $10,000 to $12,000.00 off sticker (through discounts and rebates)-then go in with $30,000.00 equity on your trade. and then a $60,000.00 pickup becomes affordable. That's "trading up". But yes-you always have a payment.
Networth is separate of a car loan. For some of us we are unaffected.
My wife has a Wrangler, we bought it six years ago, on a very regular basis we get letters or calls from the dealership saying they can get us into a new Jeep, for the same payment. It's awesome when you reply that it's paid off and they can give me a new Jeep for nothing? Usually just radio silence lol. At least do your homework...
That probably really does work a lot though.
3.2% 72mo. Originated 3/2019.
Putting extra monies on your payment amount makes the loan term shorter the way the extra is applied.
0.9% financing for 60 months for the CX-5, plus deferred payment for 3 months, plus some amount of rebate that I don't remember from 6 months ago. For various reasons I was rather astonished that I qualified for the promotional financing.
$900/mo isn't a significant part of your monthly budget?
Mazel tov to you guys!
I should have paid attention more in school.. Or maybe not have gotten married and had 4 kids. LOL
OTOH, I love how the OP specifically asked about loan terms and half the responses are from cash buyers.
Myself, I don't go for a loan if it's not under 3% interest and I typically don't exceed 60 months. I have done a 72. I've never bought a vehicle more expensive than about $28K all-in. I try to keep my car loans so they're not more than $400/mo and I often have 2 of them.
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Humblebragging on BITOG is my jam
My last car loan was on my Mustang. I financed $22K @1.69% for 60 months. This was from my credit union. I ended up paying it off a couple of months early in 2018.
Got my Veloster at 0% for 48 months. Going over numbers had me losing an extra 200 bucks in fees if i took the $1500 rebate at the time instead of the financing. No prepayment penalty and due to living with parents at the time, was able to pay off in under two years.
I have a loan-and truth be told the payment isn't that much. But I'm not sure what the Op's intent is. Does he want to buy a new car and validate that he is not alone when he finances-or what? OR-trying to find a loan amount he can justify? At any rate I don't see the point of this thread really.
