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BabyLove08
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Member since 2/08 3673 total posts
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PLEASE Talk To Me About Buying(financing a car) Versus The Balloon Payment Option
I went with my husband today to look at cars. We decided we are going to buy it, not lease it. We were planning on putting down $5,000 and then financing the rest(looking at either 60 MOS or 72 MOS) and then the salesman told us about the Balloon Payment optipon where we'd put NOTHING down. What gives? Advantages/disadvantages PLEASE!
TIA
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Posted 12/29/11 2:05 PM  |
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DumpsterBaby
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Member since 5/11 2210 total posts
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My anchor when I get tossed
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Re: PLEASE Talk To Me About Buying(financing a car) Versus The Balloon Payment Option
You can finance a car with little to no $ down and not have a balloon payment, too. Basically, a balloon payment is a huge lump sum due at the end of the term.
This is a really helpful article 
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| Posted 12/29/11 2:27 PM |
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BabyLove08
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Re: PLEASE Talk To Me About Buying(financing a car) Versus The Balloon Payment Option
Posted by DumpsterBaby
You can finance a car with little to no $ down and not have a balloon payment, too. Basically, a balloon payment is a huge lump sum due at the end of the term.
This is a really helpful article
Thanks, I understand the part about the large sum due at then end. We figured that the car would be woth about 1,500 more then what woudl be do so we can either sell it and use $ to pay off payment, or just refinance that money again. I am just so confused. Seems better so we don't have to dish out $5,000 now but it the end will there be regret? I understand you can put close to nothing down also just to do a regular finance but then our payment would be in the 700's and we don't want that.
Thank you for replying.
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| Posted 12/29/11 2:45 PM |
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sleepie76
enjoying every minute
Member since 12/07 3881 total posts
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Re: PLEASE Talk To Me About Buying(financing a car) Versus The Balloon Payment Option
Posted by BabyLove08
We figured that the car would be woth about 1,500 more then what woudl be do so we can either sell it and use $ to pay off payment, or just refinance that money again. QUOTE]
I wouldn't count on getting $1,500 more than owed. If you trade it in, they always screw you and you might end up upside down on the car. Selling it, cant guarantee someone will but it for that price.
I never liked balloon payments. I dont like the idea of having a large $$ due in 5 years.
Balloon payments are basically how american car companies do leasing, once they weren't allowed to do leasing anymore.
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| Posted 12/29/11 2:52 PM |
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MrsT809
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Member since 9/09 12167 total posts
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Re: PLEASE Talk To Me About Buying(financing a car) Versus The Balloon Payment Option
I was never a fan of the idea but we ended up doing it with DH's car this year. We were able to get a lower rate with that option and the payments are under $100 for our Jeep. We'll still owe a decent amount at the end but it's not a big deal since I know we'll always have that money set aside.
The one thing that surprised me was that if we put in extra payments then the balloon payment would just get pushed earlier. I figured we'd be able to reduce the amount but they said it didn't work that way.
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| Posted 12/29/11 3:33 PM |
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Xelindrya
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Member since 8/05 14470 total posts
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Veronica
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Re: PLEASE Talk To Me About Buying(financing a car) Versus The Balloon Payment Option
I'm not a fan of balloon payments. You really don't know what can happen between now and then. Your car may NOT be worth what you think it will be. You may not be in the same financial situtation. Who knows maybe you want to buy a house or you lose your job or have a baby or anything.
Sorry but I'm just not a fan. I always buy. I put $5000 down and make my payments as low as I can haggle. Then over pay the payment. It makes my life eaiser because the interest goes down faster when I over pay, plus if I need the extra cash (so far *knock on wood* i've never had to) I just reduce my payment to the required one instead.
I always buy and always pay off prior to the due date. That alone pays me back my downpayment on the interest saved. Or at least thats how I think of it.
And since I own it, I can sell it or not at the end and that money is mine, not due to some bank. I can trade it in and not have to worry about saying "well its worth 5000 but I owe X to the balloon so only Z is mine to use as a downpayment on a new car"
Maybe you hate the car after a few years and want to unload it. At least financed (if done right) You won't be so upside down that its an option, if you owe way more than its worth you're kinda stuck with it.
JMHO
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| Posted 12/29/11 4:04 PM |
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