3. You need to buy a car so you go to a car lot and the salesman asks you how much you can pay a month on a new car. This is a common practice. The salespeople talk monthly payment more than the price of the car. When you come to a car lot, with a pre-approved car loan from a bank or credit union, you can negotiate the cost of the car, because you're basically paying "cash" Average interest rate on new cars for people with top credit scores (781-850) is 2.96% Average interest rate for credit scores (661-780) is 4.03% Average interest rate for credit scores (601660) is 6.57% Average interest rate for credit scores (501-600) is 9.75% Average interest rate for credit scores (300500) is 12.84% If you need to finance $32,000 over 4 years and have an average credit score of 622 , what is your monthly car payment? (A) How much did you pay in interest? (B) You can stretch out the length of the loan, which is what the car salesman wants you to do; you can then afford to buy a more expensive car, in his opinion! DON'T DO THIS! If you finance the $32,000 at the same interest rate for 6 years, what is your payment? (C) How much did you pay to interest? (D) The reality is that most people pay on average 5.5% interest for a car loan. If you have a poor credit score of 465 , what would your monthly payment be on this same car loan of $32,000 for 4 years? (E) And how much did you pay to interest? (F) If that loan was stretched out to 6 years, how much is the monthly payment? (G) And how much was paid to interest? (H) SEE THE DIFFERENCE A CREDIT SCORE CAN MAKE? SO, if you have an excellent credit score of 805 , what would your monthly payment be on this same car loan of $32,000 for 4 years? (1) And how much did you pay to interest? (J) How much did you save in interest having an excellent credit score vs. the average credit score over the life of the 4-year loan? (K)