What's the catch on an early loan termination policy?
A car dealer in my town is running a special called an "early loan termination policy" that promises to pay for my current car loan, even if I'm upside-down, if I finance a car from them. It sounds too good to be true. What's the catch?
Answer provided by
Answered on May 05, 2021
“The dealer will pay off your loan for certain. But the amount you still owe will just be rolled over into the loan for the new car.
However, if you can get a lower interest rate on the new loan, it might not be that bad of a deal. Ask about their financing and seek pre-approval to see how much APR they’re going to charge.”
Did this answer help you?
Ask us a question by email and we will respond within a few days.
Have a different question?
You can meet us at our office and discuss the details of your question.
Browse by topics
What others are asking
Which car makers produce the best passenger vehicles?
"As a buyer, there are so many options out there that I don’t know where to start. Which car makers should I consider? "
Apr 13, 2021
Why am I being required to carry such high liability limits on my auto policy for my old Nissan Altima?
I live and work in NYC as a realtor. I have a 2013 Nissan Altima that I drive on the weekends. I never bring my clients with me in the car. My insurance agent requires me to add liability limits of $500,000 to the policy! Is there a way around this?
May 06, 2021
"How does a car loan work when I'm buying from a private seller via Craigslist? "
"I found an awesome deal on a used car listed for sale on Craigslist, and I’ve got pre-approval from my credit union for financing. How do I proceed from here? Do I simply give the credit union the VIN so they can give me cash to buy the car, or will they give me a check? "
May 11, 2021