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They are not going to take $2k off the principle and leave the payments the same which would mean they have to take 7 months off the back end. They will either require him to sign a new contract or the payments will be lowered automatically.
Recently, I was approved for an APR that was lower than the one in my contract. The payments were automatically lowered to reflect the change without me having to go in and sign a new contract.
My wife habitually pays more per month on auto loans and mortgage payments than the requested amount. The monthly requested payment for the loan has NEVER changed, only the balance owed.
If the monthly payment is $500, and she sends $800 as payment, her next months payment is $500. Not $300. Not some reamortized payment based upon the remaining balance and remaining months of the original contract.
Do you really think if you buy a $10,000 car for 48 months at 5% interest, then send a check for $9,500 as the first payment, that the bank will refigure payments for 47 months based on the remaining $500? They absolutely do not do that. The next payments will be exactly what was requested for the first payment, until the car is paid off.
The only time it would possibly impact the next months payment is if they are not applying the extra monies to principle. I think honda financial did that many years ago. I had a 300.00 payment, paid 400.00 but my princ didn't go down by 100.00 instead they applied it to the next month's payment.
Who knows. Maybe they did, maybe they didn't. It's not about making money on every transaction, as much as it is making money overall. A per-unit "loss" at the time of sale may still be a profit once the dealer gets volume bonuses or other incentives. There are other non-published incentives that kick in for sales period volumes, assuming excess inventory, etc. Plus all of the other ways dealers can make money while not really making money on a new unit.
My wife habitually pays more per month on auto loans and mortgage payments than the requested amount. The monthly requested payment for the loan has NEVER changed, only the balance owed.
If the monthly payment is $500, and she sends $800 as payment, her next months payment is $500. Not $300. Not some reamortized payment based upon the remaining balance and remaining months of the original contract.
Do you really think if you buy a $10,000 car for 48 months at 5% interest, then send a check for $9,500 as the first payment, that the bank will refigure payments for 47 months based on the remaining $500? They absolutely do not do that. The next payments will be exactly what was requested for the first payment, until the car is paid off.
Ya that whole exchange was comical. I have NEVER seen payments adjusted without refinancing. I had a loan that had 8K remaining on it and was paid in $225/mo payments. I paid 5K one month and the next month's payment due? Yep, $225
My wife habitually pays more per month on auto loans and mortgage payments than the requested amount. The monthly requested payment for the loan has NEVER changed, only the balance owed.
If the monthly payment is $500, and she sends $800 as payment, her next months payment is $500. Not $300. Not some reamortized payment based upon the remaining balance and remaining months of the original contract.
Do you really think if you buy a $10,000 car for 48 months at 5% interest, then send a check for $9,500 as the first payment, that the bank will refigure payments for 47 months based on the remaining $500? They absolutely do not do that. The next payments will be exactly what was requested for the first payment, until the car is paid off.
Are you calling this person a liar?
Quote:
Originally Posted by J1mbo01
When I pay extra towards my Acura Financial account, the remaining payment amount is lowered. The term is not reduced. When I pay an extra mortgage payment, the term is reduced but the payment is not lowered.
Aren't you the one who is arguing with every single person telling you you're wrong and yet you continue to stubbornly insist that no, despite all evidence and logic to the contrary, you're correct?
And you couldn't afford my help with a contract anyway.
So this person is stubborn and wrong too?
Quote:
Originally Posted by J1mbo01
When I pay extra towards my Acura Financial account, the remaining payment amount is lowered. The term is not reduced. When I pay an extra mortgage payment, the term is reduced but the payment is not lowered.
My wife habitually pays more per month on auto loans and mortgage payments than the requested amount. The monthly requested payment for the loan has NEVER changed, only the balance owed.
If the monthly payment is $500, and she sends $800 as payment, her next months payment is $500. Not $300. Not some reamortized payment based upon the remaining balance and remaining months of the original contract.
Do you really think if you buy a $10,000 car for 48 months at 5% interest, then send a check for $9,500 as the first payment, that the bank will refigure payments for 47 months based on the remaining $500? They absolutely do not do that. The next payments will be exactly what was requested for the first payment, until the car is paid off.
This is true. The only way the monthly payments can be reconfigured is if the vehicle is refinanced.
cancel that ****ty warranty.
gnomad made a great point- to make that warranty valid you have to do all your service work at the dealership where they will promptly bend you over.
Not all of them do that. Make sure to read the fine print, the more reputable outfits don't have that clause.
Not all of them do that. Make sure to read the fine print, the more reputable outfits don't have that clause.
Nor is such a clause even legal
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