Quote:
Originally Posted by Carsten
Apr: 13.99
Down payment: $3500
Monthly:$604
Term:72 months
Total cost: $46,988
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Quote:
Originally Posted by forzajuve
The fact that your total cost = $46,988 is completely absurd!!
With that total you could buy a bmw, sti, evo, OR call me crazy, 1 new frs and 1 used frs. 10-series if over rated.
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Perhaps this will add some clarity for the benefit of all:
Given his figures above, the loan value = $29,319.84
$29,319.84 for 72 months @ 13.99% = $604/month x 72 = $43,488 (plus $3500 down = $46,988 TOTAL COST)
The cost of "buying" the money = $14,168.16
Yikes!
The high interest rate and the long loan term of 72 months created this problem.
The buyer in this deal will probably be "upside down" throughout the ownership of this car. Upside down means that at a given time, he owes more on the loan than the car is worth. He has "negative equity" in the car.
It is best to avoid upside down scenarios.
This is a poor financial strategy.
Deals like this can be the first step along the road to bankruptcy.
I hope this has been helpful.