sales reciept for car always shows same balance.....

[Thumbelina58]

What is the name of your state (only U.S. law)? Indiana

I bought a car 4 months ago. When I made the 4th payment (377./mo) today, I realized the balance on the receipt was still the same as it was after the first payment. This balance is the same as the "sales price" for the car. The contract we signed states the total we owe on the car is about $8,000 more after the interest is tacked on. When I asked about the discrepancy, they said my payments were being applied to the interest, first.

Is this right?

 

[missmanda1216]

This actually may be correct, depending on what your agreement was with the dealership. places that do in house financing such as "buy here pay here" may calculate how much interest the financing may cost you for the full term and add it to the loan, with the majority of interest to be paid up front. this is known as what people may call a "front loaded" loan. that way even if you decide not to keep the car the full term, the will still make their money off of the interest. the interest is what youre paying them to do you the favor of lending the money. the balance is most likely what you would be paying if you decided to pay the loan off in full right then and there. be sure to read whatever contract you received when you purchased the vehicle.