Quote:
Originally Posted by LJohnny
Perhaps it changed, and may depend on location and timeframe from my last market research on car loan. When we purchased our last car, about 5 yrs ago, all dealerships that we checked the payment terms had an “early payment penalty” that basically prorated the interest for the term to the time of the loan close up. Maybe things have changed? This was not the case for the interest payments at the CU.
If the above not accurate any more or does not apply to all markets, no intention to misinform, just sharing my experience. OK
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Sorry, shouldn't have quoted your whole post.
But the dealer isn't making 100% of the interest on a loan, with the bank servicing it for free and carrying 100% of the risk. The dealer makes an origination fee, which is a fraction of the total loan value.