Help me understand how dealerships work?
I’m interested in buying a 2019 Mazda cx 3 that costs $18,800 (out the door price). I was told my payments would be $275 a month for 72 months (10% down payment). If you multiply $275 by 72, that means I’ll end up paying around $21,000 in full by the end of the 72 months term. How the heck will I end up paying $21,000 at the end of my term when the out the door price was $18,800? I later realized that a new 2020 Mazda cx 3 is $20,000 (out the door price) with a $309 monthly payment for 72 months. Both cars will have a 10% down payment. Makes more sense to just get a 2020 since both monthly payments are practically the same.
- StephenWeinsteinLv 72 months ago
The "out the door price" is what you have to put down when you get the car to be done paying and not have to make any more payments. Because you are making payments for 72 months, you have to pay more.
- 2 months ago
You're not factoring in interest on a loan.
- EvaLv 52 months ago
You have to pay interest on the loan.
- SumDudeLv 72 months ago
No math skills, no car. The term you are looking for is INTEREST. You pay to borrow money !!
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- A HunchLv 72 months ago
Are you sure the $18800 / $20000 is really "out the door"? I don't see it...
- sales tax
- other fees.
I believe it is the final price you are paying for the car. Not the out the door price.
It makes the most sense to not get a 72 month loan.
- NALv 72 months ago
The difference is the interest you will pay to borrow money to buy the car. Dealers often get incentives for the current year model only, which can make them as cheap as a prior year car.
- DEBSLv 72 months ago
The cost of the vehicle, registration, fees, etc is what you reference as the 'out the door price'. You can get that if you pay cash. If you're paying monthly, then you are getting a loan. Loans are not with the dealer even if they do the paperwork for you.
Loans aren't free. They come with interest which is the difference you're seeing.