Question About Car Loans

[CowPimp]

Let's say you have a car note that is $250 per month. If I decide that I'm going to pay a little extra, let's say a nice even $50 extra, then...

Does the extra money go 100% to paying down the principal, or is some of that paying interest too?

Will my payment amount actually be lowered slightly to reflect the lesser amount that I owe to my lender?

 

[Du]

Let's say you have a car note that is $250 per month. If I decide that I'm going to pay a little extra, let's say a nice even $50 extra, then...

Does the extra money go 100% to paying down the principal, or is some of that paying interest too?

Will my payment amount actually be lowered slightly to reflect the lesser amount that I owe to my lender?

It may depend on the bank's policies, but it doesn't work that way for me. I still pay $50 extra each month, but then I can get away with paying less a few months later, if that makes sense. The extra money paid sort-of accrues.

 

[CowPimp]

It may depend on the bank's policies, but it doesn't work that way for me. I still pay $50 extra each month, but then I can get away with paying less a few months later, if that makes sense. The extra money paid sort-of accrues.

You mean like if you pay 1 full month over the course of 5 months you could skip the payment month 6 and be okay?

 

[Du]

You mean like if you pay 1 full month over the course of 5 months you could skip the payment month 6 and be okay?

Exactly.

 

[Mudge]

If I pay extra it goes to principle.

 

[Pepper]

You mean like if you pay 1 full month over the course of 5 months you could skip the payment month 6 and be okay?

I have never, ever, seen a loan like that.

The extra amount will go against your loan balance but probably will not allow you skip any payments.

 

[CowPimp]

So what you're saying is these are the kinds of questions I should ask the lender, because it varies a lot from loan to loan?

 

[Mudge]

Yeah I haven't heard of loans like that here in the US, unless its part of a deal where you are asking for more funds - which wont be the case in a car loan.

 

[CowPimp]

Yeah I haven't heard of loans like that here in the US, unless its part of a deal where you are asking for more funds - which wont be the case in a car loan.

Okay. I was under the impression that generally you pay down the principle with any extra fundage you provide over the minimum payment. I'll make sure to ask about that though. My plan is to get something that's leaves me at least a little extra so I can throw $50 a month at the principle during most months.

 

[maniclion]

What if I had cash money to pay for a car, but wanted to get a better haggle price by saying I want to get a loan on it.

Because we all know that they are going to get more back over time on interest, than if someone pays straight right?

Any way, what if I paid it all in full the first month, would I be penalized or something?

 

[CowPimp]

Also, do you guys think my credit score would get me a good, or even the lowest, interest rate offered? It is currently 705, which actually might be a little bit better now. That was as of Nov 2006, and I finished paying off my credit card since then. I will probably continue to make small purchases on my card and pay them off right away to see if that helps bump it up a little bit.

 

[Du]

I have never, ever, seen a loan like that.

The extra amount will go against your loan balance but probably will not allow you skip any payments.

My Mustang is through Sovereign Bank, and thats how it works on my auto loan. No two ways about it; I am 100% sure.

 

[Du]

What if I had cash money to pay for a car, but wanted to get a better haggle price by saying I want to get a loan on it.

Because we all know that they are going to get more back over time on interest, than if someone pays straight right?

Any way, what if I paid it all in full the first month, would I be penalized or something?

I would imagine you'd get a better price by paying cash.

If they are saying you can buy it for $25g, then you can offer $24g cash here and now, said and done. Kind of a take-it-or-leave-it situation. Just be ready to walk away.

Thats my experience, at least.

 

[CowPimp]

Hah, I wish I had the money to be purchasing a car outright. Not gonna happen.

 

[Burner02]

What if I had cash money to pay for a car, but wanted to get a better haggle price by saying I want to get a loan on it.

Because we all know that they are going to get more back over time on interest, than if someone pays straight right?

Any way, what if I paid it all in full the first month, would I be penalized or something?

remember; the bank makes the money w/ interest...not the dealer..so doesn't matter to the dealer. Cash is best. There is no: "if" he qualifies...etc. Less paperwork.

 

[CowPimp]

Alright, I've got another question for you guys. I'm just kind of fishing for ideas until I talk to an insurance company directly. Here goes:

So, there is no way I can afford my own insurance policy. Is it possible to take out a loan in my name, purchase the car and title it in my name, but put it under my mom's insurance policy with me as an added driver?

 

[BoneCrusher]

Alright, I've got another question for you guys. I'm just kind of fishing for ideas until I talk to an insurance company directly. Here goes:

So, there is no way I can afford my own insurance policy. Is it possible to take out a loan in my name, purchase the car and title it in my name, but put it under my mom's insurance policy with me as an added driver?

Yes. I do the same with my ex-wife. Her car is on my insurance and it auto-debits via etf. Simple and painless.