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Originally Posted by new2the3
It still is at least 1-2k more. You have interest on your balloon payment accruing for 5 years with zero pay down and interest on the balance as well. If you run the numbers at best case scenario a select is 2k more expensive than a traditional finance but many times its at least 3k
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Agree, you are paying more to not pay the money back quicker. If you want the car bad enough to pay more for it and this is the only way to get it I do understand the reasoning behind it.
Also don't agree with the following -
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The idea is that the money that is saved via the monthly payment, you could put it towards the balloon. If you pay off the balloon at the end, the interest isn't much more than a straight finance.
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If you have the money to save toward the balloon payment at the end you should have just financed it for the 5 years and put this money directly into the payment. Or instead saving the money in an account to pay off the balloon at the end, put this money towards the principle each month (if no penalties for early payoff) and not have the balloon when it comes due (back to paying it off in 5 years). Still assuming the interest rate on the 5 years plus balloon is higher than the straight 5 years.