You’ll smile too, when you get a FiWize residual based auto loan. Why? These loans can reduce your monthly auto payment by up to several hundred dollars each month! Let that sink in—the same car you are driving now (or plan on purchasing) at a lower payment! We’re not talking nickels and dimes—we’re talking $100, $200, or even $300 each month!
You simply need to change the way you think about vehicle financing.
What makes them such a great choice? With our residual based loans, you pay the loan balance down each month until you hit the “Future Value” amount (a set residual value). Since this is only a portion of the total loan balance, your monthly payments are lower —much lower— than they would be with conventional financing, sometimes by as much as several hundred dollars!
What happens next? Well, you have options.
Lots of options, always your choice!
Did you see our home page examples? That’s real math. To estimate your savings, send us your information and we’ll get back to you with an offer. You’ll come away with a happy smiley face as well!
Ok, let’s talk about the typical reality of conventional auto financing. The value of any new or late model vehicle drops faster (depreciation) than the loan balance for a good portion of the auto loan term. What does that mean? You owe more than your vehicle is actually worth for quite some time.
A typical new car buyer trades out of their car every 4.5 years on average, never achieving equity in their car! The owner has simply made payments to the lender (to reduce the loan balance) but has no equity! Every dollar spent on payments during those first fifty months or so went to the lender, creating no monetary value for the owner. Remember: New cars depreciate most rapidly in the first three years.
This begs the question: Why should you make the high monthly payment necessary to pay off an auto loan if you never achieve equity in a vehicle prior to its being traded or sold? That question answers itself – you shouldn’t.
Let’s switch gears, so to speak, from new to used. When you finance a used vehicle (and we’re talking strictly about used cars up to five model years old), the same principle applies: For a time, the vehicle depreciates at a faster rate than does the loan balance. And like a new car loan, you pay more interest in the beginning and less against the principal balance until much later in the loan term.
The average used car loan term lasts 64 months, or well over five years! Which means the already used car will be even more used (it will have far more mileage and wear on it) by the time the loan is paid off. How well can the value of a three-year-old car hold up over the course of a five-year loan?
Answer: Not well at all.
So why make a high monthly payment on that vehicle to achieve very little in the end – unless, of course, you want to drive an old car with little re-sale value?
For borrowers who just need a lower payment, conventional refinancing can work, but it may not be ideal. Why? Borrowers may have to refinance into a much longer-term loan in order to accomplish lower monthly payments.
Sounds okay, right? No. These borrowers have only further delayed the point at which they achieve equity in their vehicle.