Car Financing Question.

[Pooks]

Does doubling up car payments save money?

Right now i am saving up for a new tiburon approx a 20,000 car.

anyways, plan is 14,000 cash downpayment by september.. finance 6,000 over 1 year or less.

But have question, on double up payments.
When u take out a loan for a car... isn't the total cost fixed.
so if u doubled up payments it woudl have no effect on how much u eventually pay.

In other words.. The interest on a double payment, would be twice as large as on one payment right? meaning in the end even if u pay triple or quadruple payments, u'll still pay the same amount of interest.
Meaning u really save nothing by making larger payments..

and thus a bigger downpayment is by far the best choice finance wise?

[Pooks]

yah i think i figured it out... because the interest is a Percentage... and not a fixed dollar number per payment. Than yeah, u get nothing by double up payment..

o well so much for the idea of getting the car early for the summer lol

[zimmy]

what? The interest is a DAILY percentage. You double up...the interest will be the same, however, you will finish your car payment out earlier that way so in the long run you'd save yourself alot of interest.

[G-1000]

Yes you will save money buy the end of the loan. You will pay off the car faster and that will make the effective intrest rate lower.

[Prada]

Yeah definitely paying off your car quicker will lead to a lower total interest charge.

[Pooks]

so i could buy the car earlier, n instead of saving the money for the downpayment, just pay off what i owe on it.
and it wouldnt be so bad LOL

[breacherup]

this is not an answer to your question, but I recently learned a trick from a wealthy friend.
do you have a high limit credit card that gives you cash back? if so put the 14,000 down payment on that card (then pay it off with the 14,000 you have saved) this way you will get a rebate on your down payment.