When buying a car, is the sale price supposed to match the car's monthly payments, length of loan, and sales tax exactly? Or, what?

Question

For example. If the sale price of car is $16,465 at 7% interest, and the dealership is trying to say you will pay $326 for 60 months (which equals 19,560) then there is something wrong, correct?

Answer 1

Hell no.  How did you get an idea like that?  Dealer finance is so bad they should be put in prison.  For people with bad credit, a dealer will charge 20% interest and price the car 25% more than it is worth.  A credit union charges 3.5% interest and will not give you the loan unless the price meets blue book.    The total ofall monthly payments is always more than the price.  Did you get out of 5th grade?

Answer 2

If you think you can drive a new car off a lot and take a leisurely five years to pay it off, and not pay interest on a loan, you are not old enough or savvy enough to buy a car.

Answer 3

That sale price you see is only the price of the car--it does not include your financing fees. If you get a loan, the interest and fees are added to what you owe on the car. 

Answer 4

NOPE 

The $16,465 is cash price for the car

The $19,560 includes fees and interest

Answer 5

No, the sales price is the price of the car - $16465

The loan amount if paid on time, in full each month will match the $19560

- which include the car price ($16456, any extras you purchase, the registration and any fees, the interest rate, how the interest is calculated (simple vs compound, if compound which it probably is, how often it's compounded), and the length of the loan. 

Answer 6

No.  The sale price is what the dealer is getting.  The total of the monthly payments plus the down-payment should match the sales price plus the tax plus the interest.  Since it's a 5 year loan at 7% per year interest, the total of the interest is going to be about 1/5 of the price.  The sales tax depends on the state.  If you're getting a $16,465 car with a 5 year loan at 7% interest, then $19,560 is about right, but actually a little low; I'd expect it to be a bit more.

Answer 7

Which part of INTEREST don't you understand? The total amount of payments is ALWAYS more than the amount financed. The purchase price DOES NOT include the interest.

It is also common to finance some or all of the taxes and title fees connected to the sale.

Answer 8

There is interest involved and apparently that is way above your competence level.

The time value of money. A fee for lending to you.

7% is a terrible car rate and clear evidence that you can't afford the car,

Answer 9

The extra money you're spending is called interest. Its essentially the price you pay for barrowing money to pay for your car. The banks way of making money.

Answer 10

The lower figure is the cash price with no credit arrangement. The credit price includes interest payments. Not too difficult to grasp.