To balloon or not?

[Sinbad]

I'm looking at buying a vehicle this week and also want to know if this is the case?

I've got a good chunk of change, in addition to my trade in and wondering if it would be better to take a balloon and keep the money in my investments or use it as a deposit upfront (or after the 1st month) and not take a balloon.

Do not take a balloon.
Ask the F&I people whether you'll get a better interest rate financing a lower or higher amount. Use that option to decide whether to use the cash as a deposit or to whack it in after the first month.

 

[Galactica]

Do not take a balloon.
Ask the F&I people whether you'll get a better interest rate financing a lower or higher amount. Use that option to decide whether to use the cash as a deposit or to whack it in after the first month.

Financing a higher amount gets you the better rate. Later you can then put in your deposit to reduce your installment or term.

 

[Cray]

How I picture car salesman offering balloon payments...

 

[ice_cubes]

You're wrong. You pay interest on the entire outstanding amount including the balloon.

ouch! ok! I had no idea

back to the drawing board