Anyone do a balloon payment?

[JKorJL]

I get a new car about every two years. Sometimes I buy them and sometimes I lease. I wouldn't typically stretch out a loan with a balloon loan but I did it a few years back with a 2012 Unlimited Sport and it worked out great. I did zero down with a payment of only like $350 month! I drove the vehicle for 2 years and when I traded it in the value was high enough that they gave me what i owed.

The lease deals don't look that great so I was thinking of doing this again. Just looking to get the lowest payment possible with zero down. And will probably only keep a couple years.

Sponsored

 

[Ralph2018JL]

I get a new car about every two years. Sometimes I buy them and sometimes I lease. I wouldn't typically stretch out a loan with a balloon loan but I did it a few years back with a 2012 Unlimited Sport and it worked out great. I did zero down with a payment of only like $350 month! I drove the vehicle for 2 years and when I traded it in the value was high enough that they gave me what i owed.

The lease deals don't look that great so I was thinking of doing this again. Just looking to get the lowest payment possible with zero down. And will probably only keep a couple years.

Never heard of this, very interesting, but of course after 2 years you have to trade, payoff or refinance.

 

[JKorJL]

Never heard of this, very interesting, but of course after 2 years you have to trade, payoff or refinance.

it's kind of like a lease deal but stretched out longer for a lower payment. For example, you're payments would be based on 2/3 of the vehicle cost with your last payment being the other 1/3...and you can either pay it, or refinance, etc. I really don't think this is a good idea for any other car because that car most likely won't be worth the payoff amount.

 

[Ralph2018JL]

it's kind of like a lease deal but stretched out longer for a lower payment. For example, you're payments would be based on 2/3 of the vehicle cost with your last payment being the other 1/3...and you can either pay it, or refinance, etc. I really don't think this is a good idea for any other car because that car most likely won't be worth the payoff amount.

Thanks for the info

 

[Carbonalpine]

It only makes sense with a wrangler or a low depreciating vehicle. I did it back in 2010 for a new BMW m3...it made sense because I got 0.9% 36 months and I owed $34k at the end..the car was worth $46k

 

[JKorJL]

It only makes sense with a wrangler or a low depreciating vehicle. I did it back in 2010 for a new BMW m3...it made sense because I got 0.9% 36 months and I owed $34k at the end..the car was worth $46k

Exactly! I worked perfect for me before. it was like signing a zero out of pocket lease for two years ($350 month) and walking away at the end.I'm just wondering if anyone else has done this recently. I checked with one dealer but his numbers were suspiciously high.

 

[sobeit69]

Exactly! I worked perfect for me before. it was like signing a zero out of pocket lease for two years ($350 month) and walking away at the end.I'm just wondering if anyone else has done this recently. I checked with one dealer but his numbers were suspiciously high.

So I can’t find this balloon option anywhere. Just a lease. I just got quoted on a lease crazy high numbers. So $480x 60 for 60 month lease with 3k down and a $3k off MSRP.

 

[StyleGuy]

https://www.penfed.org/auto/payment-saver

I ran across this awhile back. Never used the bank but I've heard great things.

In Oklahoma the problem with leasing is they tax the entire purchase price which increases the cost. In many states they only tax the payment. I think this is why I've seen factory financing with a balloon payment that is similar in cost to a lease in my state. I've only seen these type of loans offered in a few states and haven't seen them in quite awhile. I've bought cars with a similar loan before with no complaints. One was a BMW that i bought at the end and the other was a Trans Am that I traded after a few years. The gm program was called Smartbuy I think. I got a couple thousand more than payoff when I traded it for a new Yukon. Both times a much lower payment than traditional financing.

 

[Saejin]

Audi used to do this but I can’t find it on their site anymore.

Very similar to a lease, but it just shifts the risk to the owner which is now a true owner. Regular lease all the risk is on the lender as they are betting the value of the vehicle will be a certain amount after the lease term as long as the leasee stays within the lease terms. On the ballon loan, the risk is on the owner that they either be able to sell at or over what the owe or like it enough to keep it and refinance it.

I just did 5 balloon payments and called it good...nothing to worry about now.

 

[FranklinFlyer]

This is, I think, the most common car financing method in Germany. The FCA bank calls it Formula. On a VW it can be disastrous in the end, with some Jeeps too, they just don't hold the value here. But with a Wrangler or a G Wagon it works pretty good I suppose. Never did it myself but that will be the way to go when I pull the trigger on the JLU.

Sponsored