Quote:
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Originally Posted by GrimJack
...if you borrow money to buy a car, you pay mostly principal and 'earned' interest; if you finance a car, you pay all the interest first then start paying for the car and you go quickly upside down and owe more than the car is worth.
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While this most often true, as with a simple interest loan of any type, the primary reason a person ends up being 'upside down' most often has more to do with the value of the car and its depreciation rate than with the loan itself. This is, of course, especially true with a new vehicle.