Which is a better car deal: a lower price and a higher interest rate, or a higher price and a lower interest rate?

Which is a better car deal: a lower price and a higher interest rate, or a higher price and a lower interest rate?
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1 Answer

Answer :

answer:The taxes you pay are figured on the purchase price of the car, therefore it makes sense to have a lower price up front. In California, the sales tax is a substantial amount. Edit, there are several different ways to calculate interest, as well. With the so called Rule of 78, you have to pay the entire interest even if you want to pay the loan off early, so it is best to get a simple interest on the unpaid balance type of loan, that way you can pay more on the principle and owe less in interest.
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