Going in for a car loan? Working out your financial options for your car? There are a few things you need to check out before “buying” your car. Here are a few pointers which will help you prepare for your “buy”:
Financing your new car
Unless you’re paying hard cash, you need to undertake a crash course on becoming a quasi “loans expert” if you’re planning to buy a car in the near future and don’t have an expert to handle your loan repayments. It makes no difference about the type of car you desire; the basic remains the same for all car types – cars, sedans, SUVs, pickups, mini vans, jeeps etc. You “borrow” once and “repay” on a monthly basis. Since you don’t have enough cash to fund your vehicle, or maybe you do have cash but still prefer to go in for a car loan (you pay a “down payment” – a fraction of the car’s cost), you are going to need financiers. Different financiers provide loans for different purposes. And the loan criteria also changes with the type of loan you need. So do your homework and research the financiers – “what person” or “company” is providing “what”, and what are the criteria for availing the credit. It’s important to avail loan options that offer affordable car loan rates.
It’s possible to buy your car if you end up getting the required credit. So the ownership of your car depends upon the availability of your car loan. Therefore it makes sense to “shop” for a “loan” first and once you get the approval, you “shop” for your car. The process of “approving” or “arranging” for your “loan” before actually deciding upon the vehicle is referred to as “pre-approval”. Getting your “pre-approval” is important since you are sure you have a source of finance for your car and your efforts put in while selecting or deciding your vehicle won’t go to waste.
Find the right financing company
All creditors are not alike. You can save a significant amount of money by selecting the right kind of finance providing car loan rates which suits your needs. Creditors follow a common pattern for charging the interest rates; however their monthly repayment schedule can vary. It’s the creditor’s discretion to decide how he or she wants the debt to be paid off. Finding the most cost effective loan will help you save a lot of money in the end – when you totally pay off your loan.
Borrowing money against some investments or savings
There’s another option available. If you’ve saved some money and invested the same in bonds or deposits in banks, chances are you might be eligible for “overdraft” facility against your investments. In such cases the car loan option works out to be very much in your favor as a lot of latitude is given in repaying the loan back. And you end up paying the difference of your savings rate minus the “borrow” or “interest” rate.
The quicker you payback, the more you save in the end
Creditors charge their interest on the duration of the “borrowings” i.e. for how long you need to avail the car loan facility. It means your net payable interest amount is in direct relation to the time you avail the credit facility. So if you make plans to pay off your debt within a short span to time, you end up paying lesser interest and end up saving money.
Individuals planning to buy a car or any vehicle prefer to “prepare” before they actually buy their vehicle. Many companies offer auto loan finance and car financing facilities so potential buyers can avail their transport, and if they have poor or bad credit rating, it is possible to buy their car through bad credit auto finance or bad credit car finance programs. Some companies specialize in providing finance to individuals having low FICO scores.
Such companies typically provide bad credit car financing and bad credit car loan programs, to make it possible for the average American to own what he or she desires – the “perfect” car. Since many options are available due to proliferation of online car loan companies, it is recommended to search for best car loan rates. Car financing through car loans is not that difficult to avail, if you know exactly what to look out for, and how to evaluate your options. The following information can help you “prepare” your case, before you actually sign your buying contract:
1) Compare the dealer cost price with prices displayed on window stickers
It is recommended you check out the updated price list available in the market, and compare it with the dealer cost stated in the window stickers. It will give you an idea how much bargaining you need to do for the model of the car you are interested in buying. Negotiations are generally carried out after considering a few points, which are likely to figure in the arbitration process. Some of the following terms might help you prepare while negotiating with your car dealer:
1.1) Invoice Price – this is the manufacturer’s initial charge or original price offered to the car dealer. The price is usually higher as compared to the dealer’s final cost or “floor” price since dealers receive benefits such as rebates, allowances, discounts, and even incentive awards. Generally, the invoice price includes a certain fee or “charge” for freight/destination and delivery. So if you plan to buy a car based upon the invoice price, and the freight charges are already “included”, you have to make sure that the freight charges are not added again within the sale price.
1.2) Base Price – this is the cost of the car excluding the accessories and other “add-ons” options. The price includes the standard equipment and factory warranty. This price is generally printed on the “Manufacturer’s Suggested Retail” price tag.
1.3) Manufacturer’s Suggested Retail Price (MSRP) – this price is also known as the Monroney sticker, and shows the base price, the suggested retail price, the manufacturer’s transportation or freight charge and the fuel economy or mileage. As per federal law, the sticker should be affixed to the car window, and the purchaser holds the “power” to remove it once the sale has “gone” through.
1.4) Dealer Sticker Price – this is usually printed on a “supplemental” sticker. Actually, this price is the Monroney sticker price plus the suggested retail price, along with additional dealer markup (ADM) or additional dealer profit (ADP) details, and costing related to dealer preparation and undercoating.
2) Get a quote from the dealer in writing
Confirm with the dealer that the written quote is “final” and binding. If the dealer refuses to provide the commitment in black and white, find out the reason why.
3) Check out many dealerships
Find out the deals offered by various dealerships, and their reliability with the local Better Business Bureau.
4) Negotiate independently
Consider various questions related to financing, service contracts, trade-ins after you have agreed upon the price of the vehicle.
5) If you’re not confident about arbitration avail car buying services
Arbitration or negotiations are an understood factor while buying cars. If you are unsure about your negotiating skills, or do not feel confident conducting the purchase on your own, it is advisable to hire services of car-buying experts or companies and let them handle your case.
6) Shop around and compare
Contact lenders directly on your own – do not let the dealer work out the financing aspects for you. Compare the financing offers you have availed, and compare them with what the dealer offers to you. Offers may vary, so it is recommended you shop around for the best deals available, and compare the annual percentage rate (APR) along with the length of the loan. While negotiating to finance your car, focus on the monthly payment and its repayments.
The total amount you eventually pay depends upon the price of the car you are negotiating, the APR and the tenure of the loan. At times, the dealers offer very low financing rates for specific cars and models, but may not be ready to negotiate the prices of these cars. To qualify for the special rates, you need to make a large “down payment”. Many times, it is more affordable to pay a high finance charge on a car, and go in for reduced monthly payments, rather than buy a car that requires a smaller down payment and larger monthly payments.
7) Work out the auto insurance before you buy
Make sure you understand the cost incurred while insuring your car. It is important to calculate how your insurance amount is likely to change with other car scenarios – depending upon the insurance company, and it might be possible to do this online, or through your insurance agent or broker.
8) Test drive before buying
Before buying, it is recommended to get a proper feel for the performance, handling, ride, and comfort of the car before you buy it. Here are a few helpful tips that can assist you:
8.1) Test drive and check out all the models you are considering as your buying options.
8.2) Drive the cars on different types of roads and tarmacs.
8.3) The test drive should be long enough to get an accurate feel about the acceleration, braking, steering, and the overall stability of the vehicle.
8.4) Listen to the radio for its sound quality, and turn it off during your test drive so you end up listening to the car engine, tier tread noises, how the car responds at corners, and any “strain” noises originating from any part or portion of the car.
8.5) Rent a car for a couple of days, and check out how the car you are planning to buy responds as compared to the older model.
9) Make sure you properly understand the contract before signing
Take your time to read the sales agreement in depth, and make sure you get all questions answered properly. It is important not to hesitate while asking for clarifications on points that you do not understand properly. If you have to leave a deposit amount, make sure you understand the terms and conditions, as well as your obligations. Remember, signing a contract can lead to serious issues since it is binding, and in some cases, it might not be possible to get your deposit back.
As the case with all contracts, it is recommended you do not rely on verbal promises. Promises do not count unless they are in black and white. Also, do not sign a contract that has blank spaces. A contract can be considered as binding only after an authorized dealership representative approves it, so before leaving the showroom, make sure someone who has the necessary authority has “signed” it, and made it “legal”. Be sure to get a copy of the original signed contract for your records.
10) Check your car before taking its delivery
Make sure everything committed by the dealer is included with your car, and that everything works properly before you leave the dealership premises. Also ensure that:
10.1) The salesperson delivers the owner’s manual, explains special break-in procedures, and discusses routine maintenance schedules and procedures with you.
10.2) Open the hood and ask all necessary questions, including where and how to locate the oil dipstick, the windshield washer fluid reservoir, the coolant overflow canister, and the brake master cylinder fluid reservoir.
10.3) Inspect the trunk and check whether the spare tire is included, along with the jack and any other special instruments.
10.4) Make sure the salesperson introduces you to the service manager, and shows you how the service department works.
There are a couple of options when purchasing a vehicle. One option is to buy a car with cash, however due to the current economy, most buyers cannot do this. Financing your vehicle is another option to pursue, either through a financial institution you use for personal banking, or through the car dealer. Before you choose who to get the loan from, you should be aware of all the pros and cons of each kind of financing. This wise choice will be best for both your credit score and your wallet.
Financing through the dealer will get you good deals, but you should be very careful. Salesmen who work for the dealer make commissions from the loans that are sold to their customers, so do not let them pressure you into a loan that is not good for you. First find out who the lender is, make sure the lender has been around for a long time and has a good reputation with the industry. Never take a loan from a fly-by-night lender, who will give you problems down the road. Then, find out the interest rate they are offering.
There are times you will get great financing rates, especially at the end of the model year when the dealers are trying to get rid of those vehicles. However, most lenders will only work with a buyer that has the best credit. For those who have less-than-perfect credit, you may be charged an exorbitant interest rate, causing you to spend a lot more than you would if you got a loan somewhere else. Other aspects of the loan you should check out include the fees you are charged if you accept the loan as these can be fairly high and you could also be assessed a penalty for paying off the loan early.
Bank or Credit Union Financing
You will find several benefits when you get a loan through your credit union or bank, the first of which is convenience. Before you go car shopping you can apply for a loan so that you can have the pre-approval in hand. This lets you know the amount you have to spend, saving you from being embarrassed at the dealership when you get turned down for a loan. A credit union or bank can also negotiate a lower interest rate, which can translate to lower payments, or shorter loan term, which means you will pay less for the car. Additionally, by using a credit union or bank for car financing, you will be able to add this to your online banking account, making it easy to handle your monthly payment.
Regardless of what you decide to do, researching your options is always recommended. Never let anyone to force you into making a decision you have not thought out in fear that the car will be sold to someone else. More often than not, the best place to get a loan is your bank or credit union. If you are in the market for a new or pre-owned vehicle, call today and find out everything possible to find the perfect financing option for your budget and needs.
Community First Credit Union Invests in Member and Community Relationships Through Smart Checking Account Options, Bank Loans and Excellent Investment Services. Community First Credit Union offers Car Loans, Personal and Business Banking options and many more services to help you with your finances.
If your car insurance is due for renewal and you are considering buying another policy then this article will provide you with important facts that you should know about. Car insurance policies are getting increasingly expensive and you should do all that you can to reduce your costs. How much you have to pay for your car insurance is dictated by a variety of factors as they apply to you and your vehicle.
In this article we will examine coverage limits, your age, gender and marital status, your location and insuring other household members. All of these factors will have a great influence on how much you will have to pay for your policy.
Coverage limits are generally dictated by the price that you are willing to pay for your insurance. A higher level of coverage will generally result in higher premiums. The best way to find a good value policy is to comparison shop. Nowadays it is generally accepted that the best way to do this is by using a car insurance comparison website.
Your age, gender and marital status will have a great effect on the auto insurance rates that you are offered. Insurers rate drivers using a variety of criteria, if you are a young single male driver you will usually have to pay higher rates. If you are a middle-aged female married driver then your rates will be lower. Insurers calculate the best car insurance rates for you by comparing levels of risk. Those groups which are statistically more likely to be involved in an accident have to pay correspondingly higher rates.
Location plays an important part in deciding how much your premiums will cost. Drivers who live in an urban environment will usually pay more than those from a rural area. This is because drivers who live in cities and heavily populated areas are more likely to be involved in an accident, or to have their car stolen or vandalized. Insurers generally offer better rates if you’re able to demonstrate that you keep your vehicle in a garage at night. You may also be able to improve the security arrangements of your automobile by fitting an alarm, immobilizer and steering wheel lock.
Insuring other household members will have an influence on the cost of your policy and the best car insurance rates that you offered. If you have teenage family members living with you and they are added to your policy, then your costs will increase. This may still work out cheaper than if your teenage driver were to have a separate policy in their own name.
In conclusion, there are a variety of different factors which can affect your ability to be offered the best insurance rates. Some of these are coverage limits, how old you are, whether you are male or female and whether you are married or single. Your rates will also be affected by the area where you live and whether other household members are included in your policy.