When buying a new car or truck you should never negotiate the monthly payment price amount. The monthly payment price can easily be altered by adjusting the payment term length and the interest rate charged on the purchase price.

Example. You buy a car for lets say $40,000 with loan terms of 7% for 4 years, which is usually pretty standard. So your monthly payment would be about $957 and the total cost of the vehicle would be $45,522 or $5,976 in total interest payments. Assuming you put nothing down and did not trade in a vehicle.

Now, lets adjust the monthly payment lower and see what happens. Let’s say you need a payment of $680 a month. So I just adjust the length of the term longer to 72 months or 6 years and your payment drops to $681 but your total interest goes up $4K to a total payment of $49,101 or $9,101 just in interest charges alone.

Is driving a $40,000 vehicle (which is obviously out of your budget if you can not make the 4 year monthly payment terms) worth paying that much in interest charges?

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