What method of financing is better when buying a car, Balloon Financing or traditional financing?

Question by Jason: What method of financing is better when buying a car, Balloon Financing or traditional financing?
What is better Balloon financing or traditional financing? What are the pros and cons of each?

Best answer:

Answer by CarMan
Balloon loans provide lower payments but then you owe a huge final payment, which you have to finance again. What this does is keeps you upside down on your loan for years, increases your total finance costs, and makes it almost impossible to sell or trade your car before the end of both loans. Stay away from balloon loans if you can. Dealers sometimes push them just to get the payment a customer wants, without fully explaining the downside.

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