Car loan amertization?

I knew from buying my home that amertization SUCKS! Jacks up the rate you are actually paying compared to what they tell you you're paying. Because of that, I specifically asked my lender if this loan would be like buying a product at a set/flat price or if there would be amertization applied. I must have spoken to half a dozen different people at banks/lenders over the past year and each and every time I was told that car loans did NOT use amertization. I was told it was like sales tax in regard to how to calculate the cost of the loan and payments.

We pick up my 2017 GT w/PP next Saturday. Everything is set up. Today I looked at the autodraft/check my lender sent me and in the paperwork it listed the price of the loan for around $1679. That's how I figured out it was an amertized number. Because I had calculated the cost of the loan at around $760. Not saying it'll kill the deal but I'm pretty pissed I was lied to.

At the end of the day I'm curious if this is an industry standard or do some lenders NOT do it this way? If it's a standard practice...fine, I'll quit my bitchin and just enjoy the car. But if not, I'd like to know that.

Thanks

-Emt1581

Not sure what you are trying to describe or why you and your lender had two different numbers, but a quick search provided the following.

Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time. The formula for calculating the payment amount is shown below.


where

• A = payment Amount per period
• P = initial Principal (loan amount)
• r = interest rate per period
• n = total number of payments or periods

tom_sprecher said:

Not sure what you are trying to describe or why you and your lender had two different numbers, but a quick search provided the following.

Click to expand...

As I said, I'm well aware of what amertization is and how to calculate it. However, I'm just asking if amertization is a standard practice for AUTO loans. Because I was consistently told they weren't amertized.

Thanks

-Emt1581

Emt1581 said:

I'm just asking if amertization is a standard practice for AUTO loans.

Click to expand...

Any loan that is paid off in equal installments over a fixed length of time is amortized, including car loans.

Obviously you don't. Amortization is simply what your total cost of buying a car with a loan is (payment total x number of payments). One sneeky thing finance departments do is quote you a fixed interest rate and assign you a variable rate. That will affect your amortized rate. As well as length of term.

Emt1581 said:

As I said, I'm well aware of what amertization is and how to calculate it. However, I'm just asking if amertization is a standard practice for AUTO loans. Because I was consistently told they weren't amertized.

Thanks

-Emt1581

Click to expand...

It's amortization. No e. Sorry...had to.

MX5Racer said:

One sneeky thing finance departments do is quote you a fixed interest rate and assign you a variable rate. That will affect your amortized rate. As well as length of term.

Click to expand...

Not on car loans

tom_sprecher said:

Any loan that is paid off in equal installments over a fixed length of time is amortized, including car loans.

Click to expand...

Thanks, you answered my question.

-Emt1581