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Car Loan

September 18th, 2011 at 07:59 pm

I'm realizing that I don't really understand my auto loan.

I bought a new Subaru Impreza Outback in September 2010, putting $5000 down and borrowing $12,898.00 at 2.9% for 60 months. I absolutely love the car and it's been worth every penny so far. I live in a mountainous, snowy area and I appreciate the all-wheel drive, something that my Volkswagen Golf, my previous car which I drove for 11 years, did not have. I did fine in the snow with the Golf and before that with a Honda Civic (drove that for 10 years), but this time around I really wanted a Subaru. I looked at both new and used options, but decided I really like to buy a new car and drive it for a long time. I did struggle with the choice, though, because who knows if electric cars will be more accessible and affordable sooner rather than later (one can only hope) and what the future availability and cost of gas will be. In the end, I bit the bullet, wheeled and dealed to the best of my ability and bought my beautiful new silver car.

I have been paying the standard amount due per month via check, and just finally figured out how to get into my account on-line through the Chase site. I was looking at the payment history (below) and realized that I don't understand how the payment is split up. Why does the interest fluctuate so much? Is it based on how many days are in a given month? I will probably call customer service at some point for an explanation, but thought I'd write about it here also.

I'm also starting to think about "chipping" away at the principal a la Petunia 100. I'm ok with having the loan and not in a giant rush to pay it off because I have some other things I'd like to put money towards, but a little extra here and there might be a good thing.

Date Payment Principal Interest Principal Balance
09/01/2011 $231.46 $202.06 $29.40 $10,681.83
07/29/2011 $231.46 $210.30 $21.16 $10,883.89
07/05/2011 $231.46 $201.85 $29.61 $11,094.19
06/02/2011 $231.46 $198.58 $32.88 $11,296.04
04/27/2011 $231.46 $205.43 $26.03 $11,494.62
03/30/2011 $231.46 $204.03 $27.43 $11,700.05
03/01/2011 $231.46 $200.68 $30.78 $11,904.08
01/28/2011 $231.46 $204.08 $27.38 $12,104.76
12/31/2010 $231.46 $202.63 $28.83 $12,308.84
12/02/2010 $231.46 $200.15 $31.31 $12,511.47
11/01/2010 $231.46 $186.38 $45.08 $12,711.62

Hope everyone had a good weekend!

2 Responses to “Car Loan”

  1. Jenni Says:

    I was confused about the same thing when I first got my car loan. It fluctuates because its daily interest. So, depending on how many days between your current payment and your last payment is how much goes to interest.

  2. starfishy Says:

    Great - thanks for this explanation Jenni!

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