Car finance with a balloon payment
A low monthly payment can hide a large final payment. Add up everything you would pay to keep the car and compare it with the cash price.
Extra you pay compared with cash
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Total paid
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Implied annual rate
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Amount financed
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To have the final payment ready, set aside
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How it is calculated
- Total paid = deposit + number of payments × payment + final payment + fees.
- Extra cost = total paid − cash price.
- Implied rate: the annual interest that matches the amount financed (price − deposit − fees) with the payments and the final payment.
Assumptions
- Equal monthly payments and the final payment together with the last one.
- Does not include insurance or servicing the offer requires: add them under fees if paid upfront.