Buying a Brand-New Car!

Car debt has been on a rampage lately. The APR has been awful with the average being 7.58% in Florida. So, today we will be doing a little math to get a feel for the numbers of buying a brand new 2024 Ford Mustang EcoBoost FastBack.

Let’s check out different Annual Percentage Rates, term lengths, and different down payments just to see the difference you have to pay to get in a brand-new car.

Total Estimated Selling Price is $36,010

Terrible APR of 15%

15% no trade in value 72 months = $54,864 financing paid after a down payment per month is $762. Total paid: $54,864

15% APR 10% down 60 months = $46,320 financed paid after a down payment of $3,600 AND Per Month is $772. Total: $49,920

15% APR 20% down 36 months = $35,964 financing paid after a down payment of $7,200 per month is $999. Total: $43,164

15% APR 50% down 36 months = $22,500 financing paid after a down payment of $18,000 $625 a month. Total: $40,500

More than a $18,000 difference between the actual price of the car and the 72-month term. I don’t think the top circumstance is too far away from reality for some folks. Seeing how much money is being drained from interest is insanity.

Let’s look at an even worse APR. If you get these rates just laugh at these offers. Please don’t lock yourself into these for any amount of time.

Even Worse APR of 20%

20% no trade in value 72 months = $62,136 financing paid after a down payment per month is $863. Total paid: $62,136

20% APR 10% down 60 months = $51,540 financed paid after a down payment of $3,600 AND Per Month is $859. Total: $55,140

20% APR 20% down 36 months = $38,556 financing paid after a down payment of $7,200 per month is $1,071. Total: $45,756

20% APR 50% down 36 months = $24,120 financing paid after a down payment of $18,000 $670 a month. Total: $42,120

Hideous APR and hideous payoffs. $26,000 more dollars than the original purchase price. You can buy a pretty decent car in cash for that money.

Let’s look at a good APR now.

Great APR of 3%

3% no trade-in value 72 months = $39,456 financing paid after no down payment per month is $548. Total paid: $39,456

3% APR 10% down 60 months = $34,980 financing paid after a down payment of $3,600 AND Per Month is $583. Total: $38,580

3% APR 20% down 36 months = $30,168 financing paid after a down payment of $7,200. Per month is $838. Total: $37,368

3% APR 50% down 36 months = $18,864 financing paid after a down payment of $18,000. $524 a month. Total: $36,864

These payoffs didn’t even get over $40,000 no matter the length or down payment. Even the one with no down payment and six years. This is not financial advice but there is a way that the math would work if you wanted to extend the term length to six years and use the down payment into investments, not financial advice. Look for more qualified people. But if you put that $7,200 or $18,000 in investments the rates of returns should be greater than the 3% interest lost.

Now that we got both extremes out of the way. Let’s get closer to the average of a new car.

Better than average APR of 5%

5% no trade-in value 72 months = $41,760 financing paid after no down payment per month is $580. Total paid: $41,760

5% APR 10% down 60 months = $36,720 financed paid after a down payment of $3,600 AND Per Month is $612. Total: $40,320

5% APR 20% down 36 months = $31,104 financing paid after a down payment of $7,200 per month is $864. Total: $38304

5% APR 50% down 36 months = $19,440 financing paid after a down payment of $18,000 $540 a month. Total: $37,440

You will have to pay $5,750 more than the car is worth with the interest payments if you extend it out for six years.

Let’s double the APR and give it to the next person.

Pretty Rough APR of 10%

10% no trade-in value 72 months = $48,096 financing paid after a down payment per month is $668. Total paid: $48,096

10% APR 10% down 60 months = $41,340 financed paid after a down payment of $3,600 AND Per Month is $689. Total: $44,940

10% APR 20% down 36 months = $33,480 financing paid after a down payment of $7,200 per month is $930. Total: $40,680

10% APR 50% down 36 months = $20,952 financing paid after a down payment of $18,000 $582 a month. Total: $38,952

With 10% you have to pay $12,086 more than the original purchase price if you extend.

These are just some examples of pricing if you are in the market to buy one of these cars. Please just use this as a starting point for your research. There are lower lengths and longer ones. 84 MONTHS is offered at some places. Seven years of your life being plowed by interest.