(MONEY Magazine) – The balloon car loan has been floating around for decades. But most big car makers have added a new twist that may make it worth a fresh look. The main appeal of a balloon loan has always been its low monthly payments. In the past, you borrowed the difference between the car's selling price (after a 7% to 20% down payment) and 90% of its market value at the end of the loan term (usually three to four years) as projected by the manufacturer or an industry guidebook. Now, in a bid to make balloons more attractive, most big car makers have lowered the monthly payments an additional 3% to 5% by basing the loan amount on 100% of the car's future value. For a $14,560 '94 Chevrolet Lumina, on which you made a $1,775 down payment, for example, you'd pay $225 a month with a balloon loan, vs. $375 for a standard 9%, 36-month loan. When the balloon's term is up, you pay off the balance of the purchase price, refinance or turn the car back to the dealer, usually for a fee of about $250. Before taking a balloon ride, however, do a little research: -- Compare the loan's interest rate with that of other forms of auto financing. It might be as much as 1.5 percentage points more than the alternatives. -- If you plan to keep the car when the loan expires, find out from the dealer what your rate would be for refinancing the remainder of the purchase price. Laws in 21 states require the rate to remain unchanged. In other places, you would pay the finance company's prevailing rate at refinancing. If you plan to turn in the car, ask about any mileage charges you'd owe. Typically, you have to pay 10 cents to 15 cents a mile after driving 15,000 miles a year.