Nothing beats the feeling of driving your brand new car off the lot — until that nagging voice in your head reminds you that the minute you left the dealership, the car’s value dropped.
Fast Fact: Pay Off Your Car Loan – Most cars drop by an average of 11% as soon as they leave the lot.
So you might be wondering how to save money on your car loan so that when you trade in your vehicle you get more money to put down towards your next vehicle purchase.
Biweekly Auto Loan Payments Save You Money
But here’s how to keep that upbeat feeling going and even treat yourself to an upgrade on your next car (and you know there will be a next car). If you enroll in AutoPayPlus and pay the car loan bi-weekly instead of once a month, you’ll save money on interest, of course, but you also build your equity in the car faster — meaning you’ll have more trade-in value if you decide to buy a new car before you finish paying off the current loan.
How Does A Biweekly Auto Loan Program Work?
Let’s say you buy a new Honda CR-V (the base LX model) for $23,000. With a 4% interest rate, you’d pay $423.50 a month or, with AutoPayPlus, $211.75 every two weeks.
That doesn’t seem like a huge difference, but the net result sure is: At the end of Year 3, you’ll have $9,754.31 left on your conventional monthly loan, versus only $8,385.68 left with AutoPayPlus. That’s a difference of $1,368.33 in trade-in value. It’s enough to upgrade from the LX to the EX if you decide to trade in for a new model after 36 months.
Of course, if you do keep the car full term, you’ll have saved $120.32 in interest and — get this — you’ll be done with your payments three months sooner. You can bank that cash and keep driving, or apply the money you would have paid those last three months to your next car.
Driving that next CR-V off the lot’s going to feel even better, knowing you outsmarted the system and got yourself a moonroof, an awesome stereo, and some fat 17” wheels without paying a penny more. And you can tell that nagging voice in your head to shut up. Sweet.
Enroll your car loan in AutoPayPlus and start boosting your trade-in value today!