Hi all,
We are planning to buy a Mazda M3 and probably sell it after 3 years. My question is, how much will I get back or how much do I need to top-up to clear the loan after selling? Do you think my analysis below makes sense and is it reasonably conservative?
Assumptions
1. Car Price: 77,000
2. Downpayment: 10,000
3. Loan: 67,000
4. Interest: 2.45% p.a.
5. Loan Tenure: 10 years
6. Sell the car on the 3rd year (i.e. in end of 2007) for $53,000
Conclusion
1. Monthly Loan Repayment:
$695 (interest of $136.79 + principal $558.33)
2. Loan outsanding Amount after 3rd year:
$46,900 (i.e.$67,000 - 558.33*12*3)
3. When selling car, will receive $6,100 cash (i.e. $53000-$46.000) after settling the loan.
Question
Some dealers say you may need to top-up extra to settle the loan and some say you may breakeven. But I assume if the car depreciates by $24,000 after 3 years and if I pay $10,000 downpayment, I should get back something and might breakeven if market conditions are poor. But is there a high chance that I may need to top-up from my own pocket to clear the loan? Thanks and Good Friday!!