Question
Assume that you've been shopping for a new car and intend tofinance part of it through an installment loan. The car you'relooking for has a sticker price of $15,000. Big A Autos has offeredto sell it to you for $2,500 down and finance the balance with aloan that will require 48 monthly payments of $329.27; Cars-Are-Uswill sell you exactly the same vehicle for $3,000 down plus a60-month loan for the balance, with monthly payments of $268.45.Which of these two finance packages is the better deal?Explain.
Explanation / Answer
Finance Package1: Sticker Price of the Car $15,000 Down Payment of the Car $2,500 Number of Payments 48 Monthly Payment Amount $329.27 Total Payment Amount ($329.27 *48) $15,804.96 Finance Package 2: Sticker Price of the Car $15,000 Down Payment of the Car $3,000 Number of Payments 60 Monthly Payment Amount $268.45 Total Payment Amount ($268.45 *60) $16,107 Finance Package - 1 Total Payment $15,804.96 Finance Package - 2 Total Payment $16,107 Conclusion: Package - 1 is betterdeal. Why because Finance Package - 1 has less payment amount. Hope this helps Finance Package1: Sticker Price of the Car $15,000 Down Payment of the Car $2,500 Number of Payments 48 Monthly Payment Amount $329.27 Total Payment Amount ($329.27 *48) $15,804.96 Finance Package 2: Sticker Price of the Car $15,000 Down Payment of the Car $3,000 Number of Payments 60 Monthly Payment Amount $268.45 Total Payment Amount ($268.45 *60) $16,107 Finance Package - 1 Total Payment $15,804.96 Finance Package - 2 Total Payment $16,107 Conclusion: Package - 1 is betterdeal. Why because Finance Package - 1 has less payment amount.