Balloons On A Stick

You may have come across terms like " Car Dealer Balloon " or "balloon payment." But actually, what does that really mean, and how does all that work when you buy a car? Enter the world of auto dealer balloons and get the real deal about this kind of financing. A Car Dealer Balloon: What Exactly Is That? A car dealer balloon is a type of financing arrangement; you pay less each month for the term of the loan and are subsequently required to make a large lump sum payment at the end. Generally, this final payment is much larger than the regular monthly payments, and it is called the "balloon." How does it work? Here follows a very simple example: 1) Price of the car: $30,000. 2) The loan term is five years with a regular monthly payment of $400, while the final balloon payment is $10,000. You would have paid $400 a month for five years, and to take complete possession of the car, you had to pay a final amount of $10,000. Advantages of balloon ...