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Carmax car payment2/27/2024 ![]() Most drivers intend to own the car for a long while. For most people this is a major investment, second only to the purchase of a home. When an individual buys a car, they are typically buying the transportation they will rely on for years to come. Things to Consider When Shopping for a Vehicle If our site helped you save time or money, please get your accessories like cell phone chargers, mounts, radar detectors and other such goodies from through our affiliate link to help support our site. You can often save thousands of dollars by getting a quote from a trusted financial institution instead of going with the hard sell financing you will get at an auto dealership. Before you sign a loan agreement with a dealership you should contact a community credit union or bank and see how they compare. Source: Experian 2020 Q1 data, published on August 16, 2020Īcross the industry, on average automotive dealers make more money selling loans at inflated rates than they make from selling cars. Source: Experian 2022 Q2 data, published in August of 2022įor historical comparison, here is what the data looked like in Q1 of 2020 as the COVID-19 crisis spread across the United States. Here were what rates looked like in Q2 of 2022. But if for some reason you skipped a month or two, then your extra payments would go back to filling up the pay-ahead bucket.We publish an auto lender review guide to help buyers see current rates from top nationwide lenders.įor your convenience, here is data on what rates looked like across Q1 of 2023 after the Federal Reserve likely completed most of the current hiking cycle. So right now, because you still have a pay-ahead balance, your excess payments are going to principal. But once you had paid 3 months ahead, at that point all the excess started going towards principal. ![]() Meaning it was a credit against future payments, not an extra payment on principal. When you first started making extra payments, that money did go into the 'pay ahead' balance. I can't find that on CarMax's site currently, but it would explain what you're seeing. There's an older thread that I think explains this: The wording on the CarMax statement OP posted - "you are not required to make a payment this month" - indicates that at least some of OP's money is in the latter state, pay ahead, not the former state of principal repayment. Here is an older thread from someone experiencing that exact thing on CarMax: ![]() Your amortization schedule remains the same, but next month's payment is basically just waiting to be applied without you having to do anything. This does not reduce your principal balance, but instead gives you a credit towards future payments so that you can skip a few months if you want. The other is that they keep the excess as a 'pay-ahead' amount. You have advanced the amortization table, as you say, but you still have to make next month's payment on time. This reduces your interest accrual, but does not change the due date of your next payment. One is that they apply the excess to your principal balance. When you pay excess on a car loan, one of two things can happen. Here, please treat others with respect, stay on-topic, and avoid self-promotion.Īlways do your own research before acting on any information or advice that you read on Reddit. Get your financial house in order, learn how to better manage your money, and invest for your future.
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