Auto finance/over payment question

[Cuz]

Is anyone here in the financing business?
When I bought my truck the financing guy told me that if I paid an extra $50 or so every month it would knock a whole year of my term. Is this true? If I know anything it is to NOT always trust those at the dealership. I know more info is probably needed like interest rate, term length, etc. So maybe we could pm er something?
Anybody?

[Coon]

Usually, you have to specify that the overage is to be paid against the principle of the loan. By paying down the principle, you reduce the amount they are charging you interest for. That's the way I understand it in a nutshell.
Dave

[Atfulldraw]

You can do it yourself right here....

http://www.bankrate.com/calculators/auto/auto-loan-calculator.aspx

[RdRdrFan]

It all depends on how much you financed, for how long and what your rate is.

[Stan R]

Most auto loans are simple interest now... that means if you make extra payments it goes automatically to principal. you do not have to specify where it goes interest can only be charged after it has been earned.

So lets say you finance $25K over 60 months and one of those 0% interest rates. The payment would be $416.67. to pay in 48 months the payment is $520.83....

Another example... $50K at 1.9% over 72 months payment is $735.33 60 months is $874.20

Your loan would have to be in the range of 10K for that to be true.

Stan

[Cuz]

You can do it yourself right here....

http://www.bankrate.com/calculators/...alculator.aspx

That's good stuff...

[Atfulldraw]

That's good stuff...

Well, did the car salesman tell you the truth?

[Bill]

What does your contract/ loan agreement say about prepayment and additional payments made? That's what you signed.