Yes. A car is a depreciating asset, which means, in theory, it is worth less and less as time goes on. A loan is a way to buy something over time in order to make the item more affordable. However, this is a cost. The longer that the loan exists, the more interest you pay. Therefore, in the case of a car loan, by paying for it longer, you are continuously making payments as the value of the item falls. A real life example, I “saved” $787 by paying a car loan off early. The principal balance of what I owed was $787 less than what my remaining monthly payments would have equaled.
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Yes. A car is a depreciating asset, which means, in theory, it is worth less and less as time goes on. A loan is a way to buy something over time in order to make the item more affordable. However, this is a cost. The longer that the loan exists, the more interest you pay. Therefore, in the case of a car loan, by paying for it longer, you are continuously making payments as the value of the item falls. A real life example, I “saved” $787 by paying a car loan off early. The principal balance of what I owed was $787 less than what my remaining monthly payments would have equaled.