financing questions - Mazda 6 Forums : Mazda 6 / Mazda Atenza Forum

spo · 04-02-2007, 11:15 PM

hi
i am finalizing a deal in NY on a 2006 mazda sports sedan sport

i am trying to understand more on the financing as i havent see the papers yet

i took the $1000 down with 8.9% interest-- i believe the loan is with Mazda American Credit
-questions:
1. i am told ny has rules where you cant prepay prior to 90 days - anyone know what thats about
2. does anyone know how much of the monthy payments is used to pay off interest and how is used to pay off principal

anyone have any hints on what to look for in the financing agreement

thanks

Jax6S · 04-02-2007, 11:39 PM

1. Call MAC and they'll say that there is no prepayment penalty.
2. Payment formula might be useful to find out how much interest you're paying.

spo · 04-03-2007, 12:16 AM

Thanks for the formula -

Looking at your example ---how much of the375 is interest and how much is principal ---is the interest primarily paid off before the principal in the first 90 days or is it a combination

Jax6S · 04-03-2007, 06:50 AM

The formula that I gave you is a rough guide of how much the interest is for the whole financing term (in that example, $1522.50). So just divide that by the number of months (60) to see how much interest you're paying per month.

Remember, this is a rough guide. If you want to be exact, you need a financial calculator. Also, if you want to be exact, the interest amount is not going to be the same from month to month. Just like mortgage, in the beginning of the financing term, you're paying more interest and less principal and that number will slowly flip.

Modcon · 04-03-2007, 10:59 AM

Loans often come with a prepayment penalty, and in this case it seems to be 90 days.

Most car loans are simple interest loans. That means you pay interest on the remaining balance each month. In your case, at 8.9% you would be paying 0.7417% interest monthly. Assuming the interest is applied monthly (which is not true - it's probably daily, but that's a more complicated calculation) if you borrowed $20,000 that means the first month's interest would be approximately $148. If you are paying $375, then the amount applied to the principal is $375-$148=$227. The second month, the interest would be calculated on the new principal amount ($20000-$227=$19773) and the interest would be slightly less. Toward the end of the loan the interest would be very small and the payment would be mostly principal.
(Similar calculations can be used if you want to figure it based on daily interest. But like I said - it's more complicated since that means you pay interest on the interest that is accrued each day and when you make your monthly payment the interest will be slightly higher than if it was compounded monthly...)
Look online for a loan amortization program and it can print out the exact interest/principal payments for each month for the life of the loan.

lacuna · 04-03-2007, 11:12 AM

Your best bet is to call whoever you got your loan through and ask them. We can go over all kinds of differnt ways interest can be applied, but we need to know the specifics of your loan. More than likely they will allow you to pay over any amount you want, but the way the money is applied will vary.

CVette · 04-03-2007, 12:13 PM

If you are financing with MAC, you DON'T need to wait 3 months. I have been told the following by different dealers:

- You have to wait 3 months before refinancing
- You have to wait for your title before you refinance and it's just a coincidence that it takes the DMV 3 months to send you your title
- You can refinance MAC as soon as you have the title. Go to the DMV and have them expedite it. (this is the dealer I am going with)

So, I plan to refinance as soon as I have the title. See also this thread.
I'm in NY too - NY doesn't have rules with respect to refinancing. The thread I linked to mentions something about a $$ kickback to dealers if you wait 3 months. I wouldn't trust the dealer about refinancing MAC.

drewpy_dawg · 04-03-2007, 12:29 PM

They are probably trying to get you to wait 3 months so THEY get paid their headhunting fee from MAC. That was the turn around at the Honda stealership I worked for. If someone refinanced before that, they wouldn't get paid the fee, if it was over 90 days, they got the full fee from the credit company. (Note: most dealerships make alot of money here, more than the actual profit from the car in many cases.)

compucat · 04-03-2007, 12:43 PM

Yeah...there is NO waiting period. I also called when I got my loan. It's just for dealer bonus. Even my saleman told me that if I paid it off immediately, he'd lose a bonus.

spo · 04-03-2007, 01:01 PM

hi
thanks for the information-the dealer keeps telling me that i would pay a set amount of interest - so they took the total amount of interest and divided by the term of the loan

so 3544/60 =60

they dont seem to understand that principal also needs to be reduced -

but they did confirm that it was a simple interest loan

04-02-2007, 11:39 PM	#2 (permalink)
Jax6S Super Moderator Join Date: Feb 2004 Location: Jacksonville, FL Posts: 4,055 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	1. Call MAC and they'll say that there is no prepayment penalty. 2. Payment formula might be useful to find out how much interest you're paying. __________________ 2006 Black Mazdaspeed6

04-03-2007, 06:50 AM	#4 (permalink)
Jax6S Super Moderator Join Date: Feb 2004 Location: Jacksonville, FL Posts: 4,055 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	The formula that I gave you is a rough guide of how much the interest is for the whole financing term (in that example, $1522.50). So just divide that by the number of months (60) to see how much interest you're paying per month. Remember, this is a rough guide. If you want to be exact, you need a financial calculator. Also, if you want to be exact, the interest amount is not going to be the same from month to month. Just like mortgage, in the beginning of the financing term, you're paying more interest and less principal and that number will slowly flip. __________________ 2006 Black Mazdaspeed6

04-03-2007, 10:59 AM	#5 (permalink)
Modcon Rally Racer Join Date: Apr 2004 Location: Oklahoma City, OK, USA Posts: 1,708 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	Loans often come with a prepayment penalty, and in this case it seems to be 90 days. Most car loans are simple interest loans. That means you pay interest on the remaining balance each month. In your case, at 8.9% you would be paying 0.7417% interest monthly. Assuming the interest is applied monthly (which is not true - it's probably daily, but that's a more complicated calculation) if you borrowed $20,000 that means the first month's interest would be approximately $148. If you are paying $375, then the amount applied to the principal is $375-$148=$227. The second month, the interest would be calculated on the new principal amount ($20000-$227=$19773) and the interest would be slightly less. Toward the end of the loan the interest would be very small and the payment would be mostly principal. (Similar calculations can be used if you want to figure it based on daily interest. But like I said - it's more complicated since that means you pay interest on the interest that is accrued each day and when you make your monthly payment the interest will be slightly higher than if it was compounded monthly...) Look online for a loan amortization program and it can print out the exact interest/principal payments for each month for the life of the loan. __________________ Pogo (Walt Kelly) - 1970 2004 6s Glacier Silver Metallic ATX Moonroof SAB/SAC Bose Sport w/ Spoiler and Luxury packages

04-03-2007, 12:29 PM	#8 (permalink)
drewpy_dawg Learners License Join Date: Apr 2007 Posts: 20 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	They are probably trying to get you to wait 3 months so THEY get paid their headhunting fee from MAC. That was the turn around at the Honda stealership I worked for. If someone refinanced before that, they wouldn't get paid the fee, if it was over 90 days, they got the full fee from the credit company. (Note: most dealerships make alot of money here, more than the actual profit from the car in many cases.) __________________ New to me 2004 Mazda 6s MTX. Grey, spoilered, leathered, front debaged and airbox modded. Also own: 2006 Mazda 5s MTX blue and bone stock(wife's car); 2002 Suzuki Bandit 1200 s in blue with stage one Holeshot kit, carbon fibre goodies and blinker stems eliminated, Hyosung Avitar GV650 (wife's bike) in silver.

04-03-2007, 12:43 PM	#9 (permalink)
compucat Track Racer Join Date: Jun 2006 Location: Central NJ Posts: 168 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	Yeah...there is NO waiting period. I also called when I got my loan. It's just for dealer bonus. Even my saleman told me that if I paid it off immediately, he'd lose a bonus. __________________ '06 S Sport Onyx Black MTX Sedan w/ Bose/Moonroof/6cd...that's a mouthful! Oh yeah...also got XM with a few other things. Now featuring the sharkfin...beautiful

04-02-2007, 11:15 PM	#1 (permalink)
spo Learners License Join Date: Mar 2007 Posts: 6 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	hi i am finalizing a deal in NY on a 2006 mazda sports sedan sport i am trying to understand more on the financing as i havent see the papers yet i took the $1000 down with 8.9% interest-- i believe the loan is with Mazda American Credit -questions: 1. i am told ny has rules where you cant prepay prior to 90 days - anyone know what thats about 2. does anyone know how much of the monthy payments is used to pay off interest and how is used to pay off principal anyone have any hints on what to look for in the financing agreement thanks

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04-03-2007, 12:16 AM	#3 (permalink)
spo Learners License Join Date: Mar 2007 Posts: 6 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	Thanks for the formula - Looking at your example ---how much of the375 is interest and how much is principal ---is the interest primarily paid off before the principal in the first 90 days or is it a combination

04-03-2007, 11:12 AM	#6 (permalink)
lacuna Track Racer Join Date: Aug 2004 Location: Codumbass Oh Posts: 521 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	Your best bet is to call whoever you got your loan through and ask them. We can go over all kinds of differnt ways interest can be applied, but we need to know the specifics of your loan. More than likely they will allow you to pay over any amount you want, but the way the money is applied will vary.

04-03-2007, 12:13 PM	#7 (permalink)
CVette Track Racer Join Date: Nov 2002 Location: Clifton Park, NY Posts: 446 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	If you are financing with MAC, you DON'T need to wait 3 months. I have been told the following by different dealers: - You have to wait 3 months before refinancing - You have to wait for your title before you refinance and it's just a coincidence that it takes the DMV 3 months to send you your title - You can refinance MAC as soon as you have the title. Go to the DMV and have them expedite it. (this is the dealer I am going with) So, I plan to refinance as soon as I have the title. See also this thread. I'm in NY too - NY doesn't have rules with respect to refinancing. The thread I linked to mentions something about a $$ kickback to dealers if you wait 3 months. I wouldn't trust the dealer about refinancing MAC.

04-03-2007, 01:01 PM	#10 (permalink)
spo Learners License Join Date: Mar 2007 Posts: 6 Thanks: 0 Thanked 0 Times in 0 Posts Groans: 0 Groaned at 0 Times in 0 Posts iTrader: 0 reviews	hi thanks for the information-the dealer keeps telling me that i would pay a set amount of interest - so they took the total amount of interest and divided by the term of the loan so 3544/60 =60 they dont seem to understand that principal also needs to be reduced - but they did confirm that it was a simple interest loan