i am in the process of saving up for the truck that i want. i am going to sell my 77 f250 and upgrade to a superduty sometime in the next 6 months. my main concern is with the auto loan, and i have a few questions, i have paid for my first truck in full so i dont know the inside stuff.

by the time i want to buy i will have about 6-8k in hard cash. i dont particularly want to spend over say 12k. what i am wondering is, i know i have to make monthly payments, thats not a big deal, but say if i have some extra cash i want to pay the loan off with can i just take a monthly payment and pay whatever i want above and beyond that amount and then the next month pay the minimum?

like if my monthly bill is say $200, and in january i pay 200, can i pay like 400 in feb then go back 200 in march?

i am asking this cuz i will pick up a lot of overtime this summer and will be makes quite a bit more than usual so i am wondering if i can do this to speed up the loan payment process.

thanks for everything, i hope i can get my newish truck soon.

 

Yep, you can pay the minimum and then make an extra payment on the principal.

Make damn sure that you tell the bank that the extra payment is going towards the principal, and is NOT a next month prepayment, which will be used mostly to pay interest instead of the principal.

 

Paying off a loan early is called amortization and is permitted by law. Sometimes there are restrictions on how soon you can do that, but that usually only pertains to large loans like a home equity loan. We cannot pay our equity loan off for the first three years. You got good advice on specifying that the extra payments must go to the principle. If you don't, the bank can put it where they want and to put it on the interest benefits them, not you.

Another thing...don't let anyone talk you into financing without shopping around. A dealer will try to get you to let him do it because they get kickbacks on financing through the companies they have arrangements with. You have the right to finance anywhere you choose. Get the best interest rate you can for the term of the loan that you are comfortable with and that you qualify for with your credit rating. One rule that is pretty constant is that the longer the term of the loan, the higher the rate will be. Also, the better your credit, the better the loans that will be offered will be.

Good luck with the new ride!!

 

If I can't pay cash, I don't buy.

 

Make sure the loan you get is a SIMPLE interest loan. You can always pay more then the monthly payment but NEVER less and the extra goes towards the principil.

Shop for a loan yourself. BUT if you have never had a car loan in your name you will probably be required to have a co signor that has good credit. Another importanat note is most banks do not like to loan less then $5,000 and they sometimes limit the loan based on the year make and model of the vehicle and the miles on it. If you wewre trying to buy a high miles late 90' truck you may not find a lender willing to buy the loan.

The newer the vehicle the less risk the lender is taking and the better cahnce they will buy the loan, All lenders look at what is called your BEACON SCORE. That score is established by your history of paying loans etc. The higher your score the lower a rate you will get in interest.

 

You should probably be careful about advertising the large amount you want to put down until after you reach agreement on the price of the new truck.

Then start talking financing and make sure they base the loan on the already agreed on price and stick to it.

Car dealers can really play games with the down payment- basically making it disappear if your not careful.

One way to avoid it would be to get the price and then go to a bank or credit union to finance the rest of the price of the vehicle.

 

agreed....you should shop around....but just a little information for you hear too.....

I am one of the guys that buys your loan from the dealership. We have this arrangement with the dealer, not just to help us and the dealer out, but to also make it more accessable to you, the consumer. If you play the game right, you could actually come away with a lower rate by signing at the dealership than you could by coming in to your local credit union/bank....likewise, they can also put the screws to you. Ask the finance manager for their "buy"rate (provided you have good credit). Our buy rate is 1/2 percent lower than our lobby rate. So if the member goes to the dealership and works a good deal, they could actually come away with a better rate than the lobby of their local financial institution gives. All dealerships have room to negotiate rate. Usually the lender will give them a range of about 2% - 4% to work a deal. the more they mark up the deal, the more they get paid by the lender. BUT...even at the bare minimium rate, they still make some money. Even the big auto finance companies (ie: Bank of America, Bank One, Ford Motor Co, GMAC, Wells Fargo, etc) have "buy"rates. Going in knowing this term and how it works can be to your advantage in financing the deal thru the dealership, as most have no clue about this.

good luck and enjoy the new truck.