From various discussions on this board, it seems clear to me that many people could benefit from a careful study of loan amortization, that is how the balance declines with time. A key concept is that if the payments are equal then earlier payments mostly go to interest and later payments mostly go to principal, which is why one should always choose the shortest possible term given budget constraints. Here are some resources to get started, a few hours playing with these before going to the car dealer should be very educational. Remember also that depreciation works exactly the opposite way, a new car loses more value in its first year than in any later year. The combination of these two phenomena means that while one is paying mostly interest early on so the principal is not dropping much, the car's value is plummeting and therefore new car buyers tend to be upside down unless they put at least 25% down.
TU 791 02/11/2013, EQ 800 1/29/2011 , EX Plus FAKO 812, EX Vantage Score 955 3/19/2010 wife's EQ 9/23/2009 803 EX always was my highest when we could pull all three Always remember: big print giveth, small print taketh away If you dunno what tanstaafl means you must Google it