Car Loan Scoring Question / FICO Auto Industry Option score

[Michael Palero]

I financed my Hyundai Accent.
I have no previous FICO Auto Industry Option score history.

For Car Loan credit building purposes,
is it better to pay off the Accent, or spread the payments out?

[George Schilling]

I financed my Hyundai Accent.
I have no previous FICO Auto Industry Option score history.

For Car Loan credit building purposes,
is it better to pay off the Accent, or spread the payments out?

For building credit in general, it's better to continue paying payments. It's very important that all payments are made on time. If you can, have the payments made automatically from your checking account (or credit card if allowed) to avoid an accidental late payment. And of course, always pay your c/c on time and in full each month.

[Adam Richter]

When I bought my GTI I didn't have any previous auto loans on my credit history. The VW finance guy said that I needed to have an auto loan with at least two years of on time payment history to qualify as having auto loan experience and to get the best rates. Don't know if he knew what he was talking about though. I decided to finance about half of the cost over two years so I get some credit history.

If you want to pay it off early you can always pay most of it off and then schedule small monthly payments for the remainder of the loan. That's pretty much what I've done.

[Michael Palero]

Thanks George and Adam!

Is it possible to payoff the loan to the point where the monthly payment amount can be reduced for the rest of the loan period?
or will the monthly payment remain the same regardless of leftover principal?

[Rick Brown]

Be sure to check an auto loan agreement that it is not using the Rule of 78. Google it for details, but they get more interest out of you. You want simple interest based on remaining balance.

[George Schilling]

Thanks George and Adam!

Is it possible to payoff the loan to the point where the monthly payment amount can be reduced for the rest of the loan period?
or will the monthly payment remain the same regardless of leftover principal?

Depends on how the agreement is written. Usually paying more than the required payment reduces the length of the loan but does not reduce the payments.

[Mike Simanyi]

I've never seen a contract that rewrites the monthly payment based on any prepayment of principal, but there's new stuff in the industry every day. Michael, if you'd like a little more advice on this (A) stop hit cones so badly during your practice runs and (B) contact me privately.

In short, if you have a Simple Interest contract you can pay down the principal without a penalty and pay less interest overall, but you'll likely retain your contracted payment until the debt is satisfied.

Hopefully you don't have a Precomputed Interest contract (with Rule of 78 interest that Rick mentioned.)

Mike

PS Did I mention we're considering one of those dunk tanks for the top 5 cone killers during practices? Or that you annihilated a lot of cones on the practice course? ;)

[Tom Berry]

I've never seen a contract that rewrites the monthly payment based on any prepayment of principal, but there's new stuff in the industry every day. Michael, if you'd like a little more advice on this (A) stop hit cones so badly during your practice runs and (B) contact me privately.

In short, if you have a Simple Interest contract you can pay down the principal without a penalty and pay less interest overall, but you'll likely retain your contracted payment until the debt is satisfied.

Hopefully you don't have a Precomputed Interest contract (with Rule of 78 interest that Rick mentioned.)

Mike

PS Did I mention we're considering one of those dunk tanks for the top 5 cone killers during practices? Or that you annihilated a lot of cones on the practice course? ;)

I think we should have him buy the next round of cones.

[Ken Motonishi]

I was working radio in the last section before the finish ofthe school witnessing true mayhem at the wheel. First time in history I've ever radioed cones before they were hit. At one point I wasn't sure if I was at a school or watching the Dori dori challenge of 98 HP fwd cars. I nominate Mike for chief of workers next event.

[Michael Palero]

PS Did I mention we're considering one of those dunk tanks for the top 5 cone killers during practices? Or that you annihilated a lot of cones on the practice course? ;)

I think we should have him buy the next round of cones.

I'm sorry. Kyle was making me listen to LA Smoooth Jazz 94.7, the Waave.

[Steve Ekstrand]

I suggest we put a shock collar on Michael and give the red button to randomly selected course workers.

[Marshall Grice]

I was working radio in the last section before the finish ofthe school witnessing true mayhem at the wheel. First time in history I've ever radioed cones before they were hit. At one point I wasn't sure if I was at a school or watching the Dori dori challenge of 98 HP fwd cars. I nominate Mike for chief of workers next event.

pay back is a bitch isn't it Ken?

[Kurt Rahn]

I suggest we put a shock collar on Michael and give the red button to randomly selected course workers.

[Michael Palero]

So was it true you guys were betting on cones hit per run?

[Christine Grice]

So was it true you guys were betting on cones hit per run?

I think the term is "guessing." Since nothing was ever won or lost it really can't be considered "betting"

[Kurt Rahn]

So was it true you guys were betting on cones hit per run?

I think the term is "guessing." Since nothing was ever won or lost it really can't be considered "betting"

So what was Palero's over/under?

[George Schilling]

So was it true you guys were betting on cones hit per run?

But I really do appreciate you not hitting a cone in station 4 on one of your runs. I was really surprised when my +5 bet prediction on you held up. I was sure I was about to go down in flames.