Bi-Weekly Payment Option Offered for Auto Loans

For most Americans, the car loan is the second-highest monthly expense behind their mortgage.

Tuesday, November 24th 2009, 6:32 pm

By: News 9


By Dave Jordan, NEWS 9

OKLAHOMA CITY -- For most Americans, the car loan is the second-highest monthly expense behind their mortgage.

But now the auto industry is taking a page out of the mortgage playbook in helping many pay off their auto loan quicker.

A new method of payment is called a bi-weekly payment option and has been around for quite some time in the mortgage industry. It allows car owners to pay off their debts quicker and there is a benefit for the car owner and the dealer.

It's one of the little known secrets in the auto finance industry, even though it's been around for quite some time.

"We've actually had it in the car industry arena for about 10 years now," Stephen Whitlock with the Economic Advantages Corp. said.

It's a bi-weekly option that reduces the number of payments and raises the level of value in your car.

"It tends to be easier because you're also giving the consumer a smaller, manageable dollar amount, so instead of managing $500 once a month you're managing $250 every two weeks," Whitlock said.

Whitlock is part of a group that has brought this option to Oklahoma. For the past six months, he and an associate have been working with auto dealers to get this up and running.

"We are in a situation where we're communicating in a clear, concise way to the customer, they're aware of their options and that they're aware of the benefits of those options," Whitlock said.

And the benefits are staggering. Term reductions range from four to eight months, depending on the cost of your vehicle and the length of your term. And the value of that vehicle can climb as well, anywhere from $800 to $3,200. That's music to the ears of car dealers.

"Obviously if the customer builds equity in their car quicker, it allows us to trade them out of it faster," Finance Director of Hudiburg Auto Group Michael Terry said.

Hudiburg Auto group is one of a handful of dealers in Oklahoma who offer the bi-weekly payment options, although many don't advertise it.

"I don't think we've presented it as well as we probably should have up to this point," Whitlock said.

But that's likely to change.

"It's been a success so far, I think it'll probably be a bigger one," Whitlock said.

And again this is a relatively new option for auto dealers so they're likely waiting to see how this will work long-term before they start presenting it as a viable payment option.

Dealers also point out that financing a car with a bi-weekly payment plan also means the driver pays less interest over time, because the loan is paid off quicker.

logo

Get The Daily Update!

Be among the first to get breaking news, weather, and general news updates from News 9 delivered right to your inbox!

More Like This

November 24th, 2009

March 22nd, 2024

March 14th, 2024

February 9th, 2024

Top Headlines

March 29th, 2024

March 29th, 2024

March 29th, 2024

March 29th, 2024