Podcast

The podcast discusses the do's and don'ts of financing a car. It explains installment loans and the importance of considering the interest rates. It also discusses the cost of gas and how to calculate fuel expenses. Lastly, it talks about different methods of buying a car and calculating payments and interest rates. This podcast is brought to you by Toyota. Let's go Today we're going to be talking about the do's and don'ts of financing a car There are helpful ways to make payments and not so helpful ways to make payments The first topic we're going to be talking about is an installment loan with my co-host team There are many types of loans that people don't use or know about First you can get a loan that you pay off with weekly or monthly payments or payment in some other time period That's called an installment loan An installment loan is when the consumer gets to use a product immediately But of course you need to pay interest with that. You just can add a substantial amount to the cost of the purchase No matter what you're gonna Going to spend a good amount of money you don't want to spend Now what the heck is that Now for example suppose you decide to borrow to $20,000 for a used car You can select two loans Each requiring regularly monthly payments. The first loan is a three-year loan at 7% Second is a five-year loan at 9% When you're making a monthly payment for the first one of three years at 7% you're going to be spending $618 with the interest of $2,248 The second loan for five years at 9% you're going to be paying $416 a month with interest of four thousand and nine hundred and sixty dollars a month Which one would you choose? Obviously the smarter decision. Loan B because it's $2,652 less in interest while loan A is $203 more per month The second topic we're going to be talking about is the cost of gas with my co-host Skylar Jordan Now don't get me started on the amount we have to spend on gas But not only gas. All expenses like tires, tolls, parking, etc. Like what is that? The math for paying for gas no one understands or thinks about. For example say you drive 24,000 miles per year and gas average is about $4 per gallon Take your miles driven, divide that by the miles per gallon, multiply that by the price per gallon. That will give you your annual fuel expense Now say you want to find the average fuel expense of a hybrid car averaging 50 miles versus an SUV averaging 12 miles per gallon. The hybrid take 24,000 divide that by 50 times 4 you'll get $1,920 in fuel expense. Now if you take the SUV you take 24,000 divide that by 12 times 4 That gives you $8,000 in fuel expense Now I don't know about you, but I definitely prefer the hybrid over the SUV Do you know how many dead people have died? The next topic we're going to be talking about is buying a car. With my co-host Skylar Jordan There are a variety of ways of purchasing a major item such as a car But there are four typical Purchasing methods like a credit card, a personal or in-store loan, and lastly a savings plan When calculating these payments you can calculate monthly payments, payoff amounts, and interest payments For example say you buy a 2018 Jeep Wrangler at the price of $25,000. You're making the purchase with a credit card with an interest rate of 15.1% To calculate that you take $25,000 and times that by 15.1%. Then divide that by 12 Then you divide that by 1 minus parenthesis 1 plus 0.0151 divided by 12 Parenthesis with the exponent of negative 12, which is the monthly payment times 5, which is the amount of years you're paying it off You get $432.85. Now to find the interest rate of that purchase you take $432.85 and times that by 12 and times that by 5 and you get $25,971 in interest rate Now that we've gone over everything about purchasing and financing a car, I hope you've enjoyed. Thank you to my co-hosts, Keegan Cooper and Skylar Jordan. I really hope you enjoyed. Please listen again. Welcome to Faith in Theory. Thank you for listening to me. You have your family, you have your friends. Good Sunday morning and thanks so much for joining us. Click on the podcast, download it and listen to the whole show.