Why does interest on car loans do not seem what they are? |

Why does interest on car loans do not seem what they are?

I recently went with a friend who wanted to buy a car. No matter where the financing came from, the final cost of the car included payments that doubled the original interest amount on the car. Is this the way it is or is this a way for financing institutions to stick it to you.

Interest is compounded either daily or monthly…this is why it is different. But I’m not completely sure of your question.

This entry was posted on Friday, July 3rd, 2009 at 11:23 am and is filed under car loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

4 Responses to “Why does interest on car loans do not seem what they are?”

Knightro on July 3rd, 2009 at 4:39 pm

Interest is compounded either daily or monthly…this is why it is different. But I’m not completely sure of your question.
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jimmer14292008 on July 3rd, 2009 at 5:23 pm

sounds like u guys are ghetting srewed!!!! try a bank(not a credit union)!!!!….if u have good credit it should be like 5 to 9%
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SmartA$$ on July 3rd, 2009 at 5:53 pm

That’s pretty normal, if you take out a loan to buy something it usually ends up costing twice as much because you spread the interest out over several years. That’s why you should pay cash for things instead.
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David Z on July 3rd, 2009 at 6:03 pm

not sure what question is.

But if you want to buy a car by paying for it over 5 years, you could expect to pay about twice the price of the car after you pay interest.

Most of us would be better off buying a cheaper used car we could pay for with cash or repay over no more than 24 months.
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