# Buying a New Car



## FountainGuy (Jan 23, 2011)

Hi Folks,

Long time no post (for me that is)!  Well, I'm in Dubai now and have been here for about a month. My wife and I are looking to purchase a new car. We have been to a few dealerships in Al Futtaim Automall on SZR.

My questions are:

1) Is it true that when buying a new car, that the price is fixed and they will not negotiate?

2) I heard that things are not like they are back home (Canada), and that there is really only one Toyota / Hyndai / Kia etc. dealership. So even if they may have different locations, it is not that different dealerships will offer you the same car for different prices. They are all consistent and fixed. Is this true?

3) If not on the price, can you negotiate any other freebies, like car service package, insurance, mats, etc?

4) Anyone know of any good promotions / offers going on at any dealership right now?

5) We're looking for a SUV or Crossover vehicle for approx. 100k or less. It is only the two of us, so we're not looking for a huge 7-seater. Any recommendations?


Thank you in advance!!!

FG


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## Tropicana (Apr 29, 2010)

Because of Point 2, Point 1 is correct. For most cars, dealers wont go beloe invoice price, in some cases they even jack up prices. Its very hard to get special discounts, if someone offers you free insurance they are doing it for for almost everyone and not as a special thing for you
Ford offers free servicing but they do it for every customer

There is some difference in prices when you have 2 dealers for AUH and Dubai (Volkswagon, Nissan, Audi). 

There are many crossovers around 100k; If i were you i would look at the following cars

Ford edge
Hyundai santa fe/ tucson
chevrolet captiva
Rav4
CRV

last 2 might be more than 100k


Edge is considered better than any other american crossover around 100k


Some dealers offer discounts around Ramadan time, i.e. August.


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## zin (Oct 28, 2010)

If you can't get at least 5% off a new car then you shouldn't be buying anything from them. That's my take on it. We got 7% off a new car at Honda even though they weren't willing. At the end of the day it's a lot of money so should be negotiated.


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## Canuck_Sens (Nov 16, 2010)

Hi,

Before you try to negotiate the price, I recommend to do a quick research on maintenance fees.

Some car makers really charge you a lot for maintenance you know the famous car service that we have every now and then with the dealer ?

I have a friend who is paying 1500 AED some paying 2000 AED. that's a rip off I think!!

And the other thing is the warranty. If you are planning to stick around for couple of years you could look at cars SUVs that offer a good warranty coverage like Hyunday (for some cars). They are offering up to 7 years!!!!


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## w_man (Apr 16, 2010)

As others have stated - new car prices are pretty firm here. Took me a while to grasp the idea too as I was hoping for a 'deal'. We got about 2k AED off the asking price and free insurance for the first year. We tried haggling and also tried visiting other dealerships (owned by the same company) to see if we can get them to offer us something different but each time got about the same offer. Not even free tint :|

We were in the market for about the same thing you're looking for and ended up with a CRV ... purchased a maintenance package as well so hopefully won't pay anything out of pocket for the next few years. Happy with the car so far but comparing the prices with Canadian prices ... didn't really save much. I think it's mostly the Europeans who feel that cars are cheaper here otherwise 'new' cars are certainly about the same price (even after you include taxes) to Canada.

GL with your search.


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## FountainGuy (Jan 23, 2011)

Canuck_Sens said:


> Some car makers really charge you a lot for maintenance you know the famous car service that we have every now and then with the dealer?
> 
> I have a friend who is paying 1500 AED some paying 2000 AED. that's a rip off I think!!


Thanks for your reply! Any advice on what car companies tend to be charging more maintenance fees vs. others?


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## FountainGuy (Jan 23, 2011)

zin said:


> If you can't get at least 5% off a new car then you shouldn't be buying anything from them. That's my take on it. We got 7% off a new car at Honda even though they weren't willing. At the end of the day it's a lot of money so should be negotiated.


Looks like I need to be taking you car shopping!! You saving me 7% off asking price, and 1% can be yours!! haha


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## Canuck_Sens (Nov 16, 2010)

FountainGuy said:


> Thanks for your reply! Any advice on what car companies tend to be charging more maintenance fees vs. others?


Luxury/ High End cars...usually....
Yup...mercedes and so forth

I find mercedes very affordable here BUT maintenance fees wise, 4get it!!!!


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## FountainGuy (Jan 23, 2011)

Canuck_Sens said:


> Luxury/ High End cars...usually....
> Yup...mercedes and so forth
> 
> I find mercedes very affordable here BUT maintenance fees wise, 4get it!!!!


I completely understand your point! I was considering purchasing perhaps a used luxury car for the budget that I have. Then taking into account special gas (which isn't much more here I know) + maintenance & repair costs down the road... its not for me.

I'd rather buy a lower end brand new car, drive it for a couple of years, sell it and get a new one all over. It is too bad Dubai does not have a good leasing system. I know some people think that's money down the drain, but I was always a big fan of leasing back home. Driving a car is an expense, no matter how you slice it.


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## indoMLA (Feb 6, 2011)

Man, buying new cars here suck big time. No haggling on anything. You might get some services out of them, but that is not much. I had been looking for a while, but stopped looking and am going to wait till July/August as some people have told me that you can get some decent discounts on cars during that time. 

I heard of some folks getting 10k off certain SUVs (like the Pajero), but don't know if huge savings like that will come around again. 

And financing, they calculate it differently and they tell you it is low, but if you do the math the financing is high. Good Luck, bro.


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## ALLAITH (May 19, 2011)

Maybe i could help you
our company befor was a delar ship for export for nissan cars. and we have an old stock car
this is nissan qashqai 2008 the car 0 Km, 
If you are intrasting i could cheak for you how much they can finish it 
becouse actulay i am a spare parts saller in the company not a car saler
- Regarding the quastion you ask there is no fixes price in the agencies but it`s deppend on the personal you talk to him, so if you talk to sales deffrant if you reach the branch Manger
and here in UAE there is alowyes 2 agencies for almost the car brand, agenty in Abu dhabi and al ain, and other agent in Dubai and the other uniteds.
also you could cheak the cars market in dubai al awier area you could find some new cars from the showrooms.


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## rsinner (Feb 3, 2009)

Wait for a month - buy your car during Ramadan (in August). Car sales would have dipped then and there could be more offers.
Also, buy towards the end of the month when the salesmen are more desperate to meet the targets and more wlling to negotiate.
Last year when I was car hunting (around May) I did find the salesmen more than willing to negotiate (things like free insurance or an outright discount). Also keep an eye out on Gulf News for the various advertisements/offers.


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## g11king (Apr 3, 2011)

This has been a helpful topic!! Any more info would also help me!


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## desertdude (Nov 22, 2010)

Personally I would never buy a new car here simply for the reasons for having to deal with the stealers. Trying to keep it "agency maintained" which is always expensive and depending on the location and dealer, a big hassle. Booking appointments for service, leaving the car for a few days there, which is not a good thing if thats your only ride. And 9 times of 10 they do nothing and charge you ridiculous amounts and the car has to go back in after a few days for exactly the same thing in went in for the first time. You'd be lucky if you don't have to do this a few times to get the simplest thing fixed/

Having the cars maintained at the dealers, they give you horrible quotes and you just can't say sod it I'll get it done from somewhere else and they are always on the look out for reasons to void your warranty. Some places even if you look at your car the wrong way you warranty gets voided ( ??? )

Thankfully being bit of grease monkey myself and having a good network of resources I can get most things done reliably and on the cheap. Also helps if you read up a little about your car or join a few brand specific forums, also helps a lot. 

The main aim is first of all not to buy a lemon to start with and look up what are the known faults of that paticular car. So you atleast know if they have been addressed, what to look for or if they haven't popped up yet how much damage you can expect. 

New or old they are machines and eventually go wrong. Sitting there wishing in a star nothing will happen is not going to work. 

Basically know your car and keep it in good nick and keep an eye on it and if anything doesn't feel right, have it checked, fixed or replaced before the wheels fall off. 

A little preventive maintance goes a long long way.

As for the OP its a good strategy to go for a new one and dump it after a few years, but still thats no guarantee that nothing will go wrong or that if it does the stealer will cover it as its their job is to avoid doing anywork under cover as much as possible, every minute spent working on a car under cover is money lost plus all the hassles mentioned earlier. 

An Xterra used to be priced around that budget dunno what they go for now plus Nissans stealers are on the top of my list for being the worst culprits with the most shoddy service imaginable. 

Also as mentioned after some time when the new 2012 models start to arrive they want to get rid of old stock so are there are some deals on new cars then.


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## Bigjimbo (Oct 28, 2010)

indoMLA said:


> Man, buying new cars here suck big time. No haggling on anything. You might get some services out of them, but that is not much. I had been looking for a while, but stopped looking and am going to wait till July/August as some people have told me that you can get some decent discounts on cars during that time.
> 
> I heard of some folks getting 10k off certain SUVs (like the Pajero), but don't know if huge savings like that will come around again.
> 
> And financing, they calculate it differently and they tell you it is low, but if you do the math the financing is high. Good Luck, bro.


The last sentence is incorrect. I was a finance manager at Toyota, and the rates are very low out here in the UAE, typically 4- 4.5% flat, which is on par with the best rates in the UK.


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## Bigjimbo (Oct 28, 2010)

rsinner said:


> Wait for a month - buy your car during Ramadan (in August). Car sales would have dipped then and there could be more offers.
> Also, buy towards the end of the month when the salesmen are more desperate to meet the targets and more wlling to negotiate.
> Last year when I was car hunting (around May) I did find the salesmen more than willing to negotiate (things like free insurance or an outright discount). Also keep an eye out on Gulf News for the various advertisements/offers.


Last year was very different as there was a lot of supply and not too much demand hence the deals for last year. Also ramadan is typically the most busy period of the year.


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## Bigjimbo (Oct 28, 2010)

desertdude said:


> Personally I would never buy a new car here simply for the reasons for having to deal with the stealers. Trying to keep it "agency maintained" which is always expensive and depending on the location and dealer, a big hassle. Booking appointments for service, leaving the car for a few days there, which is not a good thing if thats your only ride. And 9 times of 10 they do nothing and charge you ridiculous amounts and the car has to go back in after a few days for exactly the same thing in went in for the first time. You'd be lucky if you don't have to do this a few times to get the simplest thing fixed/
> 
> Having the cars maintained at the dealers, they give you horrible quotes and you just can't say sod it I'll get it done from somewhere else and they are always on the look out for reasons to void your warranty. Some places even if you look at your car the wrong way you warranty gets voided ( ??? )
> 
> ...


Again this is a bit of false economy as the old models are worth a little less as they are the previous model year.


The best advice to give would be to buy a Japanese brand car as they have amazing value retention out here in the UAE. Depreciation is the single most expensive aspect of ever owning a car and the right model Japanese car out here can sometimes retain 65% of its value over 3 years, which is remarkable.


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## desertdude (Nov 22, 2010)

Ah yes that's the way it should be and now that I think about it you're right. Because I remember a few cases where the repair bill was too large, one case to the tune of 95k on a merc owned by a well to do local family which had just given up the ghost one day andrefused to move. The stealer said most of the driveline as well as the suspension had to preplaced so they had to wait for go ahead from the manufacturer and after a week it was no go, citing some fault of the customer which lead to such aproblem. 

In the end the local coppers were called etc etc to make a long story short work was done under warranty with the customer having to pay something like 5k for some consumables or something. Who paid for the repairs, the stealer or the manufacturer I don't know.


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## indoMLA (Feb 6, 2011)

Bigjimbo said:


> The last sentence is incorrect. I was a finance manager at Toyota, and the rates are very low out here in the UAE, typically 4- 4.5% flat, which is on par with the best rates in the UK.


Bigjimbo, I am going to stick by my statement but I should clarify it somewhat... I went to several dealers who finance through several UAE based banks (ADCB, EmiratesNBD, Mashreq, etc.), they all had (on paper) low interest rates compared to the Western banks (Standard Chartered, HSBC, etc.) but when I actually placed the numbers into my amortization calculator, I realized that they calculate the interest based on a fixed principal (at the start) and not on the declining principle basis. People on this forum have confirmed this. I have even asked several of the UAE based banks why they have come up with per month loan values that are higher than what the Western-based banks have come up with and either they don't know or they say the other banks are calculating it wrong. Not cool to see an advertised 3.99% loan in actuality cost an individual 8-9% over the term.


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## Bigjimbo (Oct 28, 2010)

All personal finance and motor finance is calculated on a fixed price, start capital amount, and as such is a flat rate throughout the term of the loan. I must have set up close to 500 (in the uk and out here) agreements and none of them use a declining principle base. There difference between an advertised rate ie 3.99% and a rate of 8 -9% would only be relevent if you convert the flat rate over the term and try to guess an approximate apr figure. The UK is pretty much alone in using APR's as they are severely misleading. A flat rate is a truer, much more comparable figure as it makes no difference what term the loan is over.


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## Jynxgirl (Nov 27, 2009)

Bigjimbo said:


> All personal finance and motor finance is calculated on a fixed price, start capital amount, and as such is a flat rate throughout the term of the loan. I must have set up close to 500 (in the uk and out here) agreements and none of them use a declining principle base. There difference between an advertised rate ie 3.99% and a rate of 8 -9% would only be relevent if you convert the flat rate over the term and try to guess an approximate apr figure. The UK is pretty much alone in using APR's as they are severely misleading. A flat rate is a truer, much more comparable figure as it makes no difference what term the loan is over.


So if you pay the loan off after one year, you are still stuck paying the entire interest amount???


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## Bigjimbo (Oct 28, 2010)

No, you get a pro rata rebate for the remainder of the interest due.


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## indoMLA (Feb 6, 2011)

Bigjimbo said:


> *All personal finance and motor finance is calculated on a fixed price, start capital amount*, and as such is a flat rate throughout the term of the loan. I must have set up close to 500 (in the uk and out here) agreements and none of them use a declining principle base. There difference between an advertised rate ie 3.99% and a rate of 8 -9% would only be relevent if you convert the flat rate over the term and try to guess an approximate apr figure. The UK is pretty much alone in using APR's as they are severely misleading. A flat rate is a truer, much more comparable figure as it makes no difference what term the loan is over.


I was merely trying to state that the interest rate is not what they tell you it is. Initially (in any loan) you pay more interest than principal, but as the term goes on, you pay more principal and less interest. But I don't see that going on here... 

I even took my laptop to a Toyota dealership and asked how he was calculating the monthly payment when I was getting a lower number from the tools I had. He told me that it was the software and that interest is fixed every year, meaning that if the interest rate given is 5% on a AED120,000 car loan, then every year I will pay AED6,000 in interest every year. I just looked at the dude with dis-belief as that shows me or tells me that the banks will get their interest charges regardless. In the states, this is not how it works. Some of the guys from HSBC and Standard Chartered told me that that is how the UAE banks operate.

Maybe I am not good with explanations, but here is an example from the forums - LINK. 

Even if you use the EmiratesNBD Auto Loan calculator (from their website) the calculation is done how we expect it to be done, but the guy quotes a different monthly payment. When I have reverse calculated the values, the interest is not even near the amount they quoted.

Again, I have only been here a few months, but from my experience, this is what I have witnessed.


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## indoMLA (Feb 6, 2011)

Jynxgirl said:


> So if you pay the loan off after one year, you are still stuck paying the entire interest amount???


From what I read and have heard from others, yes.


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## Bigjimbo (Oct 28, 2010)

indoMLA said:


> I was merely trying to state that the interest rate is not what they tell you it is. Initially (in any loan) you pay more interest than principal, but as the term goes on, you pay more principal and less interest. But I don't see that going on here...
> 
> I even took my laptop to a Toyota dealership and asked how he was calculating the monthly payment when I was getting a lower number from the tools I had. He told me that it was the software and that interest is fixed every year, meaning that if the interest rate given is 5% on a AED120,000 car loan, then every year I will pay AED6,000 in interest every year. I just looked at the dude with dis-belief as that shows me or tells me that the banks will get their interest charges regardless. In the states, this is not how it works. Some of the guys from HSBC and Standard Chartered told me that that is how the UAE banks operate.
> 
> ...


Ok this is ENTIRELY incorrect. How on earth do you think it is fairer for the interest to be weighted toward the beginning of the agreement? This was outlawed in the UK years ago. It really is simple, and I will try to demonstrate.

Say you borrow 100,000 over 5 years at 4%. The capital is 100,000. The interest is 5 years x 4% (20,000). Add the two amounts together = 120,000. Divide by 60 months = Payment. (2000) 1666 capital repayment, and 334 interest. 

If after one year you decided to end the loan, the total amount owing would be approx 80000 capital. The settlement figure would be 96,000 (Capital and interest) BUT, there would be an interest rebate of 48 x 334 (interest) less a penalty, typically equal to 2 months interest. So the maximum settlement figure would around 80,000 plus 2 months interest. This is an infinitely fairer method then making 12 payments, deciding to settle and still having nearly all the capital to repay.

I hope this is now clear......................


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## Jynxgirl (Nov 27, 2009)

So if you pay lets say double, is the interest and total amount owed readjusted every month on calculating what you are paying on?  Or you are still stuck paying the interest for the time period until you can pay it off in full, and just adjusted for the time left?


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## Kawasutra (May 2, 2011)

Bigjimbo said:


> Ok this is ENTIRELY incorrect. How on earth do you think it is fairer for the interest to be weighted toward the beginning of the agreement? This was outlawed in the UK years ago. It really is simple, and I will try to demonstrate.
> 
> Say you borrow 100,000 over 5 years at 4%. The capital is 100,000. The interest is 5 years x 4% (20,000). Add the two amounts together = 120,000. Divide by 60 months = Payment. (2000) 1666 capital repayment, and 334 interest.
> 
> ...


This is how they screw the people here, because the interest rate looks low but it isn´t. The interest rate is for the following years also calculated on the full amount not on the reduced amount that you already paid off.
But the guys from the dealership don´t care take it or leave it.


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## indoMLA (Feb 6, 2011)

Bigjimbo said:


> *Ok this is ENTIRELY incorrect. How on earth do you think it is fairer for the interest to be weighted toward the beginning of the agreement?* This was outlawed in the UK years ago. It really is simple, and I will try to demonstrate.
> 
> Say you borrow 100,000 over 5 years at 4%. The capital is 100,000. The interest is 5 years x 4% (20,000). Add the two amounts together = 120,000. Divide by 60 months = Payment. (2000) 1666 capital repayment, and 334 interest.
> 
> ...


1. I am merely quoting to those in the thread of what I was told at the dealership. I don't know and can't determine if the person I spoke to was just misinformed, uneducated, or just did not know what he was talking about. 

2. I disagree with the above, as any bank will calculate the loan's monthly payment to be 1,841.65 based on the above information you provided. However, according to the information you provided and if 2,000 is the monthly payment calculated, then the actual interest rate is 7.42%.
2a. When I run the same scenario in my applications, then I get the monthly payment to be 1,841.65 (like some of the banks websites I went to) and the interest paid by specific year to be:
Yr 1 - 3,664.46
Yr 2 - 2,913.37
Yr 3 - 2,131.68
Yr 4 - 1,318.15
Yr 5 - 471.47
And the end of the 5 year term, total principal paid is 100,000 and total interest paid is 10,499.13. 
I don't know how you were taught this in the UK (not saying bad or good), but I was explaining it the way i was taught back home. The principal declines and the new interest and principal amount is calculated in every subsequent month from the initial. 

3. I think we are going to have to agree to disagree Bigjimbo... I don't think the banks here are quoting the correct interest rate as I have used my financial tools (amortization schedules, loan calculators, etc.) to purchase cars and homes before and have never seen a discrepancy in the amounts until I started dealing with the banks here.


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## Bigjimbo (Oct 28, 2010)

indoMLA said:


> 1. I am merely quoting to those in the thread of what I was told at the dealership. I don't know and can't determine if the person I spoke to was just misinformed, uneducated, or just did not know what he was talking about.
> 
> 2. I disagree with the above, as any bank will calculate the loan's monthly payment to be 1,841.65 based on the above information you provided. However, according to the information you provided and if 2,000 is the monthly payment calculated, then the actual interest rate is 7.42%.
> 2a. When I run the same scenario in my applications, then I get the monthly payment to be 1,841.65 (like some of the banks websites I went to) and the interest paid by specific year to be:
> ...


The only scenario that I know that the interest adjust monthly/yearly is long term loans for houses. Using the above total interest payable of 10500, the flat rate is a little above 2%. This may be plausible for the last year as interbank lending rates have tumbled, but it certainly isn't/wasn't available a couple of years ago.

By the way this whole argument is immaterial in the UAE, as lending against the purchase of a vehicle is not so simple as the west.


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## indoMLA (Feb 6, 2011)

Bigjimbo said:


> *The only scenario that I know that the interest adjust monthly/yearly is long term loans for houses*. Using the above total interest payable of 10500, the flat rate is a little above 2%. This may be plausible for the last year as interbank lending rates have tumbled, but it certainly isn't/wasn't available a couple of years ago.
> 
> *By the way this whole argument is immaterial in the UAE, as lending against the purchase of a vehicle is not so simple as the west*.


1. Back home, most loans are set up the way I described with the principal declining and the interest and principal calculated based on the initial amount minus the payment made the previous month. The payment never changes, but the allocations to principal and interest does.
There might be a fee for paying off the loan, but it is not much. 

2. This is the main reason I chimed in. I was just trying to inform others that the way the banks do the calculations here differ from what most are used to seeing.

I think we arrived at the same conclusion is just took the better part of a day and a lot of math, but.... Yaaaay!!


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## EXPAT09 (Sep 11, 2009)

Basically, guys, if you can afford paying cash just do that.


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## ky1976 (Jun 2, 2011)

indoMLA said:


> From what I read and have heard from others, yes.


well, bank websites state that 1% of principal outstanding is charged for pre-payment.. which is fair enuf


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## Roadworrier (Jul 3, 2012)

indoMLA said:


> 1. Back home, most loans are set up the way I described with the principal declining and the interest and principal calculated based on the initial amount minus the payment made the previous month. The payment never changes, but the allocations to principal and interest does.
> There might be a fee for paying off the loan, but it is not much.
> 
> 2. This is the main reason I chimed in. I was just trying to inform others that the way the banks do the calculations here differ from what most are used to seeing.
> ...


Concur...US loans calculate interest based on amount of principal owed, by the end of the loan the vast majority of your payment goes toward principal, not interest!


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