Car Loans – Paying Off Early

I have a Honda CRV, a 2005 that I purchased back in June of 2005, and I love it.  Anyways, I bought the car brand new, and got the special rate of 2.9% financing.  I asked during the sale process whether I would be penalized for trying to pay off my car early, and part of what I loved about the deal is that the answer to that was “no” I wouldn’t be. 

What the finance officer at Honda told me was to make sure I write two checks, one for the amount of the payment, and then an extra one, for whatever amount I wanted to pay over the minimum due, and write the words “toward principle balance” on the check so that the processors of my payment at Honda would know that it goes toward the principle (call me silly, but I thought that’s what they’d do anyways, but oh well.)

I just got a bill.  I paid aobut $200 extra and this bill is reduced by that much – it’s just funny how they do that to you!  Assuming you want to pay the minimum always, so they can get more money over the long haul!  Of course, I’ll keep paying more than the minimum, but I can’t blame them for trying – that’s how they all stay in business!