Track 22 of 25

Car loans

Price against payment, term against total interest, depreciation against amortization, and what repossession actually does. The everyday version of a line against an asset that moves.

25 lessons

Mark a lesson complete and it is remembered here.

Why a quote leads with the monthly numberThe figure on the glass is a carrying cost, not a price, and the two answers are not interchangeable.6 min
The installment formula, workedA fixed monthly amount is the number that makes every period's interest and remaining principal add up.7 min
APR, and what is inside itFees packed into the principal change the rate that actually describes the cash, not the contract rate on the paper.7 min
Total interest over the life, computedLife-of-loan interest is a cost that lives in time, not a change in how much principal the car will support.7 min
How term length changes the paymentA longer schedule shrinks what leaves the account each month and leaves more of the claim still sitting on the car.6 min
How term length changes the total paidThe months you add back are extra accrual, so the cheaper installment is the more expensive loan.6 min
What a down payment does to the financed amountCash paid before the first installment is a smaller principal, which is a smaller claim against the same car.6 min
Down payment and first-month loan to valueThe ratio on day one is loan over cash price; a week later the denominator is already a different number.6 min
Depreciation as a schedule, not a surpriseThe car's mark falls on a timetable, so the collateral the lender is looking at is a declining series, not a shock.7 min
Amortization as a schedule, and why early payments are mostly interestThe first year of a schedule is mostly paying for time already used, which is why the balance barely moves.6 min
The months the car is worth less than the loanUnderwater is a ratio, not a feeling: the loan sits above the mark for a run of months you can count.6 min
Negative equity, namedA sale at today's mark leaves a loan still standing, because the claim is larger than the collateral.6 min
What happens when negative equity is rolled into the next loanThe gap from the last car is new principal on the next one, so the asset and the claim start unmatched.7 min
Day-one loan to value after a rollOpening above one hundred percent means the maintenance test is already failed before the first installment is due.6 min
Add-on products financed into the principalProducts packed into the principal raise the claim against an unchanged car, which is a larger loan on the same collateral.6 min
GAP coverage, at a mechanical levelWhere it pays at all, the product settles a named shortfall after a total loss, and only the lines the contract lists.6 min
What a coverage product pays, and what it does notA claim check rebuilds the car, or part of it, and leaves the financed product sitting in the balance untouched.6 min
Leasing: residual, capitalized cost, money factorSomeone else names the future mark, and the monthly figure is only the path from today's price to that number.6 min
Lease payment arithmeticThe monthly figure is two charges stacked: one for the scheduled fall in the mark, and one for the use of money.6 min
What a lease-end residual doesThe number written at the start is an assumption, and the mark at month thirty-six is a different fact.6 min
Credit-score tiers and how they move the rateThe same principal at four posted rates is four different interest legs, because the tier is the spread.6 min
Two tiers, one principal, the extra interestTen points of rate is a different interest total, not a different capacity against the car.7 min
How repossession works, procedurallyTaking the car is a forced sale of the collateral, on a clock that need not include a cure window.8 min
What a deficiency balance isAfter the sale, the leftover claim is the old balance minus what the sale produced, plus the costs of getting there.6 min
What voluntary surrender changes, and what it does notHanding the car over chooses the timing of delivery and leaves the sale, the fees, and the leftover claim in place.7 min

Educational only. Nothing in this track is investment, legal or tax advice, or a recommendation to enter into any transaction. Completion is stored in this browser and nowhere else.