Before the Internet and phone apps, how were car loan payments made?

[Scott5114]

I have payment books from 5/3 Bank for my current auto loan. I pay online, but I do have the books to mail in the coupon with a check to process payment.

Do they still cash the check if you make it out to 1.6666666667 Bank?

[US 89]

I do see the problems some people have with autopay. Just this past month, my apartment complex charged me 20 days worth of erroneous late fees, and never contacted me in any way to tell me there might be a problem. I didn't notice until my September autopay posted and it was quite a bit larger than  rent plus utilities normally costs me.

I took it up right away with management, and within a week they did get the late fees taken off. But they still have that money which they'll credit towards next month's rent. In the big scheme of things, not a huge deal, but that money could be sitting somewhere else making interest. If it were a larger amount of money or if your landlord or creditor is less helpful I could easily see this becoming a bigger issue.

[ZLoth]

It varies. The coupon book was very common for student loans, auto loans, and mortgages. However, there was also "buy here, pay here" and "we finance EVERYONE" places with confiscatory interest rates where you paid every month.

The less said about "buy here, pay here" places... the better. They serve a niche yet extremely vulnerable customer.

[kkt]

Autopay can be a disaster if your creditor is initiating the transfer.  We had a few thousand $ in credit card debt for a while and put it on autopay for the minimum due, and then usually made an additional payment each month.  Then we got a windfall and decided to retire that debt, called the credit card company to make the payment the full amount of what was left.  They did.  You'd think that would be the end of the story?  Then on the due date the following month they took several thousand $ out of our checking account again.  We didn't have that much so our bank transfered the money TO them with an overdraft fee and negative balance on our account.  Even though this now gave us a credit balance on our card.  Bank was helpful and reversed the transfer a few days later and even waived the overdraft fee.  So that should be the end of the story, right?  Well, no, even though I called the credit card company and complained and they swore it was taken care of, the next month it all happened again.  Overdraft, reversed by bank, etc.  This time, though, instead of asking the credit card company to straighten it out I closed the account.

[Scott5114]

Even if you have plenty of money to pay the bill and no billing error happens, autopay can screw you over if you have multiple accounts and you simply have forgotten to put the money in the correct one. (I know several people who have multiple accounts so they can set aside money for the X bill by putting it in a certain account, money for the Y bill by putting it another account, etc.)

[jeffandnicole]

I don't practice what I preach here, but with autopay, set it to the minimum amount.  As long as you pay your bill before the due date (and I would say at least a few days before the due date), it shouldn't process the autopayment. 

This is supposed to be useful if you can't make your payment on time due to personal issues (hospitalization, unexpected travelling, just plain forgot, etc).

I only autopay a few items - mortgages (1st & 2nd), car loans (now paid off) and car insurance.

[bulldog1979]

Michigan woman's auto-payments hid her death for over 5 years

[Rothman]

Pfft.  Autopay the statement amount on your credit card(s).  No interest if paid by due date.

Makes me wonder how they come up with a minimum payment amount, actually.  Seems arbitrary.

[ZLoth]

Except for my mortgage, all of my monthly expenses are charged to my credit card which gives me Costco rewards at the end of the year. That credit card, because of the interest rate, is paid off at the end of each month. As for the mortgage, that is set on autopay and paid to the next highest $100 with the difference between the amount due and what I actually paid applied as an extra payment to the principal. But, my budget doesn't allow for a new car payment, so I'm keeping my two low-mileage but paid-off cars (one was mine outright, one I was "gifted" from my mother last year since she no longer drives) in good shape until the end of the decade.

Makes me wonder how they come up with a minimum payment amount, actually.  Seems arbitrary.

It's simple... it's to pay off the interest expense each month plus a teeny-tiny percentage of the principal. That makes purchasing a major item at a high interest rate and making only the minimum payments a very expensive proposition in the long run.

[Rothman]

Except for my mortgage, all of my monthly expenses are charged to my credit card which gives me Costco rewards at the end of the year. That credit card, because of the interest rate, is paid off at the end of each month. As for the mortgage, that is set on autopay and paid to the next highest $100 with the difference between the amount due and what I actually paid applied as an extra payment to the principal. But, my budget doesn't allow for a new car payment, so I'm keeping my two low-mileage but paid-off cars (one was mine outright, one I was "gifted" from my mother last year since she no longer drives) in good shape until the end of the decade.

Makes me wonder how they come up with a minimum payment amount, actually.  Seems arbitrary.

It's simple... it's to pay off the interest expense each month plus a teeny-tiny percentage of the principal. That makes purchasing a major item at a high interest rate and making only the minimum payments a very expensive proposition in the long run.

How is that "teeny-tiny percentage" calculated?

[kalvado]

Except for my mortgage, all of my monthly expenses are charged to my credit card which gives me Costco rewards at the end of the year. That credit card, because of the interest rate, is paid off at the end of each month. As for the mortgage, that is set on autopay and paid to the next highest $100 with the difference between the amount due and what I actually paid applied as an extra payment to the principal. But, my budget doesn't allow for a new car payment, so I'm keeping my two low-mileage but paid-off cars (one was mine outright, one I was "gifted" from my mother last year since she no longer drives) in good shape until the end of the decade.

Makes me wonder how they come up with a minimum payment amount, actually.  Seems arbitrary.

It's simple... it's to pay off the interest expense each month plus a teeny-tiny percentage of the principal. That makes purchasing a major item at a high interest rate and making only the minimum payments a very expensive proposition in the long run.

How is that "teeny-tiny percentage" calculated?

If you have the Capital One Quicksilver Cash Rewards Credit Card, for example, your minimum payment will be either $25 or 1 percent of your balance (whichever is greater), plus new interest, late payment fees and any past due amounts.