So I bought a car last year for 37k total and put 12k down making my loan 25k, 6 years with a 3% APR. My cars current value is 30k. From what I’ve heard and have seemed to find online is that the bank still owns 25k on the car, the 5k I’ve paid so far on the loan is theirs and doesn’t go towards my ownership of the loan/car, and I only get 5k back. Is that correct? I don’t understand why but I’m also not the most financially versed
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Please check if you are on an interest only loan. That is a type of loan most shady dealers/lenders and sometimes not-so-shady ones offer to folks to make their monthly payment seem minimal.
None of the money you pay on an interest-only loan goes towards the actual principal of the car loan. Which means even after paying a significant sum, you will still owe the initial 25k to the lender, since all that you paid is only covering the interest part.
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