TFS calculates your interest as simple interest, they take the balance of the loan at the beginning of the month and multiply it by your interest rate divided by 12 for example balance * (interest/12) that is the interest component of your monthly payment.
Since you have overpaid by an amount equal to 4 monthly payments, they have indicated you do not have to make a payment for 4 months.
If you do that, your payment in 5 months will be a much larger interest component then principal but the payment amount will be the same, however the loan schedule will still complete as originally planned and you simply made 4 payments in advance.
If you continue to prepay you will continue to push back your next due date and eventually if you do this enough the loan will be paid off early as the balance will be $0 and there will be no future payments.
So your net savings is the number of months saved from the end of the loan * you monthly payment and then you subtract the overpayments you made. You will see that you have saved more months of payments then you overpaid especially if you were making full extra monthly payments every month.
I know how this works as we had a TFS loan years ago that we prepaid like this, we paid a 5 year loan off in 9 months, and the rate was 1.99% we overpaid by substantially more than the monthly payments. Each payment pushed back the due date by several months. We just continued to make the regular scheduled payments (and our overpayments) until the loan was paid off. For us this was just about managing cash flow, we preferred to pay the car off over a few months then tying up that much cash at the time of purchase.
So to answer your question if you are confident that you will sell the car before the next payment is due then you are simply sending TFS money in advance for them to send it back to you when you sell the car, however if you don't sell the car to save on the interest you should continue making the payments if this is your best return on investment.
Now I don't recall seeing your interest rate posted to know if this is a cheap rate and worth prepaying or not, or your overall finances so to that I cannot comment.
Also as another poster mentioned selling a car to private party with a lien against it is complicated, as you need to have a lien free title to transfer, TFS will not release the title to the new owner unless they are paid off first, so unless you have other funds to clear the title you might want to consider that before selling to a private party.
http://www.carmax.com/ might be a better option may not be as good a deal but they will work with you on the title issues better. Or some other cars for cash type of operation.
Good luck!
-Mister FancyPants
