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How to get the lowest payment?

09-14-2008, 03:12 PM
I have never bought a new car. My goal is to buy a new car and have a really low monthly payment.

If the car I want to buy is $20,000 and I have $10,000 to put down on it, and I plan on getting a 60 month loan what would give me a lower payment;

1. Putting a high down payment ($10,000) and financing $10,000 the rest over 60 months.


2. Putting a low down payment ($2500) and financing the rest ($17,500) over 60 months, but almost immediately paying the finance company an additional $7,500 towards the principal?

I guess my question is that since the loan is over 60 months and it is the principal + interest, would the monthly car payment minimum be lowered for the length of the loan?

I ask this because I have a feeling that if I put $10,000 down, they would make me get a shorter loan, keeping my monthly payment higher than I really want.

If anyone knows of a good way of getting a LOW monthly payment, I would appreciate any advice.


09-14-2008, 04:43 PM
I'm not aware of any banks or credit unions that allow you to make payments toward "principal only" like a mortgage.( On most auto loans that specify, you can make early payments without penalty and that payment goes to both principal and interest.) With that said, I think you'd do better putting the $10,000 down and financing the rest. If your credit rating is good you should be able to "shop around" between financial institutions to get the best terms in APR and length of loan. In my experiences, credit unions seem to have the best terms and conditions to get the type of loan you are looking for. Banks may not want to finance only 10K for 5 years whereas a credit union might be more willing to.

09-14-2008, 05:19 PM
I wouldn't even mind paying off the interest + principal, what I really want to know is;

If the loan was for $17,500 for 60 months, and I was making payments of $500 per month on this loan, then I pay off $10,000 all at once, what happens to the payment? Does it stay at $500 per month until the loan is paid off in full or does the minimum payment get reduced so the remaining debt would be paid off over the remaining time left on the original 60 month loan? My goal would be to reduce the $500 down to like $200 without any refinancing or whatever. What I want is a really low monthly payment. In the past I have always bought used cars for cash outright, so I would like to make the payments as painless as possible. I am not even trying to get out of the interest on the loan, I just want the payment to be low.

09-14-2008, 11:27 PM
My experience with car loans in the past leads me to believe that if you make a $10,000 payment at once, a certain percentage will go towards interest , and the other percentage will go towards the principal. As for that causing your monthly payment amount to decrease, I say it probably would as these loans are based on a specific time period and it is expected one to make those payments in that timeframe until it is paid off. As a result of the large payment, the monthly payment should go down quite a bit by the financial institution's calculations as they figure the time remaining divided by the a total amount still due. For example, I have a similar type interest / principal loan at a local bank. It is for a home improvement loan and I borrowed $10,000 for a period of 7 years at 3% interest. My monthly payment is around $134 and some change. When I pay I usually round up to a higher, even amount. As a result of these small "overpayments", my monthly amount due has dropped to around $122 so it's probably safe to assume that this might also occur to your loan as it's a similar type loan. That is my experience, and I'm sure if someone else has a different experience, they'll post it. You could also call the bank/credit union and pose that question to them as well.

09-24-2008, 07:23 AM
In my experience, I have not found paying extra on acar note reduces subsequent payments. Your best bet is to lay your $10,000 down on your $20,000.00 car. I would almost guarantee that your 60month note should not be more than $200 if you have a good credit score of 680 or above. That payment is also dependent on whether or not you shop around and secure a decent rate on the car such 6% interest a year. Dealers will screw you over and tell you that the best rate they can give you is (X) when the truth is banks are offering any schmuck off the street (Y). X - Y = ALOTOF$$$$$$$SAVED
Do your homework bud. I deal with credit Unions only. They borrow money from members that they in turn use to lend out to you the consumer. This saves you a lot because your not paying for the middle men that banks have to use. Therefore you save a good bit of money.


09-24-2008, 08:37 AM
In my experience, I have not found paying extra on acar note reduces subsequent payments.
A lot depends on the financial institution and how the loan is set up. A few years back I had a loan for my truck. The monthly payment was $325. I paid at least$333/mo. (figuring 3 months worth of payments is just shy of $1000,) if not more and when I received the next monthly bill for the loan, the statement balance for the monthly amount due on the loan had decreased. As time went on that amount had whittled away to just over $300/mo. So with some banks or credit unions, it is possible to see a reduction in the amount of subsequent payments if you pay extra each month over a period of time.

09-24-2008, 07:19 PM
:smile: :smile: :smile:
Getting the lowest payment begins with first making the best deal possible on the new car. Studying info on various websites re the car and options and determining MSRP versus true Invoice, etc. gets you prepared for the ranges of dealer "offers/pricing" you'll face. But learning how to position yourself so you can control the deal with the dealer to make the best deal is a learned trait. My friends bet me I could learn something in this regard by watching some videos on link removed by Moderator - advertisingand I did. I'll put them to use in January when I make my new car trade. Study, get smarter and get the lowest price and lower payments will follow.:grinyes: :grinyes: :grinyes:

09-29-2008, 02:20 PM
:wink: :wink: :wink:

I am in a simular situation and want to make sure i get the real number and best price per the lowest payment possible issue. I have looked at a video,inc about how the car dealerships work you when they have you in their office. I am sure it will help me when I start the process in the next several weeks. You can see these videos at (

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