Americredit
Date: Wed, 02/20/2008 - 16:45
I took the car off the lot for 13,500. Now two years later, Americredit, says I still owe them 13,000.00.
Can they do this? Can they use my payments for interest, leaving me owing a huge payment at the end of my 5 year loan?
I have paid them $8,160.00 in the past two years, which means my car loan amount should now be $5,340.00.
This is not fair. They stated that all car loans are interest only in the first two years. Is this true, or a blatent lie?
Thank you
Welcome to the forum peaches. This sounds like it might be a sit
Welcome to the forum peaches. This sounds like it might be a situation regarding the truth in lending act. I only have vague familiarity with this act but I'm sure another member with more experience will be along to better help you.
hiya peaches-- unfortunately, what you are experiencing is th
hiya peaches--
unfortunately, what you are experiencing is the true nature of financing a car. Thats how it always works. until you are most of the way through paying off the loan, you typically owe more on the car than it is worth in straight money, if that makes sense.
Your calculations arent correct. You said that when you left the lot, you financed 13,500. By your math, there would have been zero interest and no taxes or other fees added to that 13,500. I am sorry to tell you but that is not realistic. You signed a credit agreement when you bought this car that told you how much interest you were being charged--I honestly dont see how you can complain about it now because you signed the paper then. Here--I will show you....
If you financed $13,500 with zero interest and no other tax or anything else, and your term was 5 years, your payment would be exactly $225 per month.
225 times the 60 months (5 years) is 13,500
Now, if you financed exactly 13,500 when you bought that car, tax included or paid up front, your payment with 20% interest over a 5 year term would be $357.67 per month. Look on your original paperwork and you will see the numbers. There will be a section to tell you the total cost you will spend over the life of the loan, and using the 13,500, 20% interest over 5 years, your total that you will have paid for this car at the end of the loan is $21,460.20
You are being charged interest, and everyone pays interest on car loans, with few exceptions. If you have been making payments on time, it might not be a bad idea to shop around and see if you can refinance the loan with another lender--this will potentially save you interest in the long run.
