Please help which option should I pick?

[aces67]

I've been paying $592 a month on a Jeep Grand Cherokee that I did NOT reaffirm. Baby #3 is coming soon and I need more room and a lower note. The Jeep gets 13 mpg in town and 16 on the highway and the tires for it are $232 EACH.

I found an 06 Dodge Grand Carvan that gets's 18 and 25 mpg and the tires for it are $95 each. They want $10000 for it plus TT&L.

Now here's the options:

Cap One will go the whole amount which I'm figuring will be about $12K drive out. It's 17.79 percent for 36 months at $432.57 a month.

OR

The dealer can do it with $1500 down and 17.25 %. The note for 36 months will be 375.66.

Now I can come up with the $1500 but with Christmas coming up I really need to save my money but If I go with option B I'll be paying $2048 less over the life of the loan so that is cheaper right?

[HakunaMatata]

Is there an early pay-off penalty with either loan? If not, you could go with the no down payment option and pay extra on a monthly basis. Paying extra on option #1 would decrease the total interest and length of the loan. Plus, you may have the option to refinance at a better interest rate once the BK dust settles.

[aces67]

Originally Posted by HakunaMatata

Is there an early pay-off penalty with either loan? If not, you could go with the no down payment option and pay extra on a monthly basis. Paying extra on option #1 would decrease the total interest and length of the loan. Plus, you may have the option to refinance at a better interest rate once the BK dust settles.

No pre pay penalties. Dh thinks we should just finance the whole thing and be done with it.

[RBisDebtFree]

I would get the no down payment one and try to pay off the loan early. BUT, I would not be paying extra monthly, I would be paying the full monthly payment and saving away the extra that I want to pay every month. Once you save enough to pay off the loan, pay it off and be done with it.

I know it is a little extra interest you will pay for keeping the cash on hand and getting finance charges on the loan amount but it gives you a little extra protection. Let's say (I hope never happens) you get some unexpected bill or lose a job and stay without it for a few months, what's better at that point: few thousand dollars extra cash on hand or being ten months ahead on your loan?

Don't want to seem smarter/wiser than everyone else, I hope it doesn't feel that I am pretending to be. But it's just a plan I came up with for myself in case I need to get an auto loan

Hope this makes sense and is helpful!

[freedom7]

option one only costs you 500 more over the whole loan, you are paying less per month but only because you are putting 1500 down, so 2000 savings is really only 500.

Go with no money down and keep the money in the bank. just an opinion

[killinstinct]

I hate to over-complicate things, but how many miles on the van? And make sure it's been taken care of, Dodge/Chrysler is infamous for tranny problems. The last thing you need is a tranny to crap out within a few months, costing another $2500 or so...

Generally, if the service has been performed (tranny flushes every 30K, oil changes, etc.) you should be good. But beware! For some reason Dodge/GM sealed their trannys a while back and told people they will last 'the life of the car'. This is complete crap. Flush trannys every 30K miles, for god's sake.

[lifelesson]

Will they let you test drive it a few days? can you take it to a car repair shop you trust? I agree It might be too good to be true.

[lifelesson]

and BTW did you check out teh new insurance rate for this car?

[BobMango]

Actually, the cost difference between the two options is 924.42
Option A total payments are $15,572.52 and option B total payments are 14648.10.

So you can save $925 over the three years, plus have more cash available each month by taking Option B.

The real question is how much of a difficulty will it be to part with the down payment? I've made lots of decisions saying things like "it's only $75 a month more if we do this". I'd sure like to have some of that money back now!

[aces67]

We ended up getting an entirely different minivan. We bought an 08 Dodge Grand Caravan. It's still under warranty and we paid 13,400 for it.

Cap One was offering zero down at 17.25 on this year model.

We ended up going with Chase though. We put $1500 down and got financed at 12.9%. We are very happy with our purchase!

The 08 has side impact air bags as well as front driver and passenger air bags so my insurance has gone down $13.00 a month.