How does this car finance work?

Lets say iam about to buy a 2007 Kia rio for about $10,000

with 7% intrest. So now the car is mine and i make payments every month. now lets say i have a 72 month term, which is alot of years that ill be paying for that car, lets just say in 3 years i decided to get rid of this car. how does this work? can i sell the car half way through and just match the retail price, or do i need to match with the price the car will be in 72 months with 7% intrest, or can i just give then or trade the car in?

How does this car finance work?

The odds are your Kia will most likely be %26quot;upside down.%26quot; They have terrible re-sale values, however that doesn%26#039;t mean they aren%26#039;t good cars. If you plan on getting rid of the car in 3 years, take a shorter term loan. Simple interest loans are similar to mortgages, so if you take a 6 year loan, your payments would be $170.49 per month and after 3 years, your balance would be $5,521.57. Your interest paid to that date would be $1,659.21, for a total of $6,137.64 out of pocket. The car would probably be worth $4,000 - $3,500 as compared to current values v/s purchase price.

A 60 month payment would be $198.01 and after 3 years, your balance would only be $4,422.62 after paying $1,551.05 in interest, for a total of $7,128.39 out of pocket. Your re-sale value would still be tha same and although you would have paid about $990.72 more throughout the 3 years, your loan balance would be $1,098.95 less. Coming up with $27 per month is probably alot easier than to roll the negative into your next vehicle purchase. In addition, anything you roll into the next loan will be subject to interest all over again, so that $1,098.95 extra that you roll will end up being even more once it%26#039;s included in your next auto loan. I hope this helps you!

Here is a copy of a 72 month amortization schedule:

http://www.bankrate.com/brm/auto-loan-ca...

Here is a 60 month:

http://www.bankrate.com/brm/auto-loan-ca...

How does this car finance work?

If you decide to sell in 3 years, then you will need to get AT LEAST what you owe on the loan. Intrest on these types of loans are very decieving. you think 7% of the 10,000 well it accrues on the balance periodically. so in the long run on a 72 month loan with 7% interest you are actually going to be paying somewhere in the neighborhood of $15,000. Being as Kia%26#039;s loose their value VERY quickly, you will wind up owing more than the car is worth, and have difficulty selling it for the remaining cost of what you owe. You will still have roughly $7,500 left to pay for the car after 3 years, and being as the price RIGHT NOW is $10,000 that would mean it can only depreciate $2,500. In 3 years that car will PROBABLY be valued somewhere in the $3,000 range. Financing is a cruel world where the banks get richer and unfortunatley we get poorer.

How does this car finance work?

mention this to ur car finance Company they will make the contract they way u want and give u the terms in case u sell in halfway.

How does this car finance work?

Bottom line is don%26#039;t buy a Kia.

If you%26#039;re going to finance $10,000, find a clean, lower mile used car that has already lost most of it%26#039;s value, but will retain what resale value it has. Your best bets are:

Acura TL 1999+

Honda Accord (V-6) 1998+

http://www.autotrader.com/fyc/vdp.jsp?ca...

Lexus ES300 1997+

http://www.autotrader.com/fyc/vdp.jsp?ca...

Toyota Camry (V-6) 1997+

http://www.autotrader.com/fyc/vdp.jsp?ca...

http://www.autotrader.com/fyc/vdp.jsp?ca...

These are great cars and people know that. Lots of people looking for a used car have families, and they want a safe, comfortable, reliable 4-door sedan.