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Discussion Starter · #1 ·
On base we have what is referred to as a "Lemon Lot". Basically, it's a park-and-sell, you park your car in the lot and sell it yourself.

On the lot is an Orange Caliber SE. The only options this Caliber has are the MP3 input jack and CVT. No, keyless entry, not toneau cover, nothing extra, it's a bone stock Caliber with 11,000 miles on it. The tag in the wondows says, "Paid $21,000, will sell for $17,000".

Who in their right mind would payt $21K for a car that stickers for $14K. I doubt the seller will get anywhere near $17K for it. My Caliber has a lot more options (toneau cover, MP3 player, keyless entry, etc.) and I only paid $16K which included $1K for overseas shipping. Why would anyone pay that much for fewer options on a used car?

If I remember, I'll take some pics tomorrow.
 

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I agree with your comments. You can still buy a new base SE for $14,500 US which includes the deliver charge. Hopefully any buyers will do a little research before parting with $17,000.
 

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Sounds like the dealer added a ton of charges to the sticker such as Paint Protection ($20 spray on coating, sold for $900), Window tinting for $500 instead of a more reasonable $150 or so, then lots of finance surcharges such as gap insurance, extended warranty, window engraving etc.

I bought my SXT fully loaded with power sunroof, uconnect, sirius, music gate, evic etc. msrp of 21K, paid 19K last year.
 

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I'd say the owners were upside down on their loan, meaning they paid 22000 for a 14500 car. Happens all the time, even happened to us. Sounds like the owner is trying to get out of debt, and still owes 17000 to get out of the deal.
 

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haha 18300 for me with outher **** just under 30000 total deat
 

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That is crazy.... How exactly do you end up upsidedown on the loan? Just making minimum payments with high interest over a long period of time? I like to overpay 50%-100% to avoid the interest till i can refinance. (my credit score is AWFUL!... student loans, nuff said)
 

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People end up upside down on loans when they buy more than they can afford. Then they trade it in on something less expensive but take a loss. This loss is tacked on to their new loan. Good way to never get out of debt.
 

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Here's how we ended up upside down. We bought a 2005 Mitsubishi Endeavor and got a pretty good deal since it was a program car. The bad part is that it only runs good on premium gas. When gas prices rose to 3.45/gallon, it was taking $60 or more to fill it up. We were getting about 21 mpg, so we decided to see if we could find something better on gas, but still with soom cargo room. We found the Caliber rated at 30mpg highway, and at a good price. However, since we had only owned the Mitsubishi for a couple of years, we still owed around 15000 for it. The trade-in value we got for it was 12,500, so the dealer tacked on the 2500 difference onto the Caliber price. So yes, you end up paying 2500 more for the car than the sticker price. Yes, it sucks to think about it that way, but in the long run, it will work itself out. We got a better % rate on our loan than on the Mitsubishi, which makes our monthly payments lower. Plus, we are getting more mpg than in the other truck. I figured it out on paper, and although it will take awhile due to the payments on the loan, we will still end up cheaper in the long run by trading off to get the Caliber.
 

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Thats why it is always good to put as much of a down payment as you can on a new car. 20% is usually a safe number to prevent you from being upsidedown. You really get sucked in with the 0% down promos, because then your upsidedown as soon as you drive it off the lot.
 

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Yeah when i got mine i figured the least amount financed the better, so i scraped up every bit of cash i could afford to put down and threw it all at it. Still financed most of it though so im making extra big payments to avoid some of the interest. I have some nice excel interest charts if anyone wants one? I keep all my payments in a chart so i can watch remaining balance and remaining net interest expected. Im on pace to pay under $2000 interest on a 9.99% loan for a 72 month term. Its slightly off from chrysler's due to the fact that they compound the interest likely every min or second even. I have a $15 difference right now in my remaining balance when figuring the 15 day forcast they give on the number.
 

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Discussion Starter · #11 ·
In most cases, you can cut your payment time and interest paid almost in half without paying extra simply by splitting your payments up twice a month. Say your payments are $300/month--instead of paying $300 once a month, pay $175 twice a month. Most banks compound their interest starting from the day the last payment is received, so if you pay once a month, you are paying 30 days worth on interest. However, if you split your payments up, the bank recieves your money every 15 days and you only pay 15 days worth of interest at a time and the rest of the payment goes toward principal.

Since at the beginning of the loan you pay more in interest than in principal, splitting payments makes the biggest difference in the first couple of years. Of course, the longer the loan, the more time you can cut off. On a 4 year loan, you will probably cut off 1/2 a years at most, but on a 7 year loan, you can cut off about 3 years.

The higher/lower the interest rate will also affect the ammount of time cut off. 15 or 30 days at 10% is more interest than 15 or 30 days at 2%. So, if you have a lower interest rate, you will cut off less time since less of your payment goes toward interest anyway.

Then, if you add in extra money each time you pay, you'll cut off even more time. In the above example, if you send in $200 twice a month instead of $175, you are paying an extra $50 per month, which brings your principal down faster.

We've been paying on our Caliber using the split payment method since our first payment last August. We rounded up each of the two monthly payments to the next $10 (e.g. 27 is rounded to 30). The ammount extra paid each month is only about $10, but according to our last statement from the bank, we are already paid ahead just over one whole monthly payment (we can skip a payment and not get penalized at this point). That's over one whole month ahead in just eight months of making payments just by splitting them. At our current rate, a person would be able to cut off about 8 months of a 5 year loan.
 

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Bi-monthly payments cuts the interest two ways. Because of interest compounding as stated but also because twice a year you will be making an extra 1/2 payment. If you pay every two weeks then two months per year you will be making 3 payments in that month.

Getting your paycheck every 2 weeks works the same way. Twice a year you will get 3 paychecks in one month. I love those months!!
 

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Discussion Starter · #13 ·
I get paid on the 1st and 15th of every month. No three paycheck months for me. Once we get our CC paid off, we're going to be taking the money we shell out for that each month and putting it on the car. That should speed up our payments some more.
 
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