What To Look Out For When Obtaining Car Loans

Applying for a car loan is the first step to buying the car of your dreams. We all want to get the best deals available to us so we should get some information together before stepping in to a car dealer.

1. One thing to definitely know is your credit score, this is a score that everyone has and is devised by the lender depending on your credit report. The credit score allows a lender to analyse whether or not the customer will be able to pay off the debt on their loans. The average score is 723 so any score over 700 will give you the best chances of finding the lowest interest rates available. You can find your credit score online for free and will give you a good indication as to your borrowing capabilities.

2. You need to compare quotes on car loans from various lenders to find the best deals; many will offer the same kind of terms so looking out for the APR (Annual Percentage Rate) is one way to differentiate between the various deals. The lower the APR, the better the deal and another thing to watch out for is longer term deals as these normally have higher interest rates, so might not be the most cost effective way.

3. Look at the market when looking for your dream car, if you have an idea on how much that type of car costs in today's market, you will have a good point to start bargaining from. Buying a car is a good investment and getting it for a good price on a low interest rate car loan. If you are well informed you will increase your chances of getting a good deal; if you are not then you will probably end up paying over the odds.

Consider these 3 things when looking for car loans and the easiest way to find them is by going online and comparing quotes from the various lenders. Find out your current situation and what you can afford before jumping in to buying a car.

When looking for car loans it is important to analyze your options. Make sure loans are for you and you can afford it and will not cause too much stress and hassle. For the best deals on car loans, shop online and compare the best deals from the leading providers.

Article Source: http://EzineArticles.com/?expert=Karl_Bantleman

New Auto Purchase: Lease Vs. Buy

Essentially, Leasing is just an alternative way to finance a new vehicle. We know that when purchasing a new vehicle the down payment, sales tax and license fees are required to be paid up front. However when leasing a new vehicle you are required to pay only the first monthly payment, a security deposit (usually same as monthly payment), and the license fees. The sales tax (which is based on the capitalized value of the vehicle) is actually amortized over the term of the lease in most states. In other words, the taxes are included in the monthly payments.

Capitalized Cost

Essentially the capitalized cost of a new vehicle is the actual price you have agreed to pay for the vehicle.

Gross Capitalized Cost

The gross capitalized cost of a new vehicle includes the selling price of the vehicle (which is the capitalized cost plus acquisition fees, extended warranty, accident & health insurance, dealer title fee, payoff on your trade-in, credit life insurance, gap insurance and any other fees the dealer decides to charge you). Buyer beware; that most people really don't ever know what their capitalized cost is because it is buried within the gross capitalized cost and the dealer doesn't actually reveal this number unless he has to. Most car deals made at auto dealerships are negotiated on the basis of payment rather than price. This applies to both leasing and purchasing. Don't get caught in this trap! Make the dealer reveal the selling price for every payment offer he makes you!

Adjusted Capitalized Cost

The adjusted capitalized cost of a new vehicle is the gross capitalized cost minus (-) your down payment, net trade-in amount, rebates, license fees and taxes along with any other deductions given.

Depreciation/Residual

When purchasing a new vehicle your payments are based on the full value or selling price, plus extended warranty, tax & license, minus (-) rebate, down payment and net trade-in value. However, when you lease a vehicle your payments are based only on the "depreciation or your use" of the vehicle during the entire term of the lease. The depreciation is actually only a portion of the capitalized cost of the vehicle and is determined by the term of the lease, number of miles driven and condition of the vehicle at the end of the lease. The payments on a lease are based on the deprecation money factor (which is a form of interest rate) and the amortized taxes. Therefore, you can actually drive a more expensive vehicle with a lower payment if you lease. Please note that the depreciation is actually estimated and set at the inception of the lease.

The residual is the portion or balance of the adjusted capitalized cost after the deprecation has been deducted. The residual is just put aside in limbo until the end of the lease. The higher the residual - the lower your monthly payment. At the end of the lease you have two options. You can either turn the vehicle back into the bank or leasing company, or you can buy the vehicle outright for the residual balance. You can even refinance the residual. But keep in mind if you turn in the vehicle with more mileage than allowed on your contract, you will be charged any where from .12 to .25 cents for each extra mile. In an auto lease you are limited to a specific number of miles in your lease contact. The average would be from 12,000 to 15,000 miles per year. You may drive any number of miles in any given year but you cannot exceed the number of allotted miles or you will be penalized. If you purchase the vehicle the charge for the extra mileage will normally be waved. Most banks and finance companies will allow you to add an extra 15,000 to 20,000 miles to your lease contract depending on the term of the lease. However, the cost of the extra miles will be added to your gross capitalization cost and your monthly payment will be increased accordingly.

Ownership

When you have entered into a lease contract you cannot terminate the lease or turn-in your vehicle prior to the ending date of the contract. If you do this the bank will report this as a voluntary repossession on your credit record. On an auto lease the vehicle is actually registered and titled to the bank or leasing company. Therefore you do not own the vehicle, the bank does. You get to use the vehicle and are legally responsible for the upkeep and maintenance. Please note, if you don't maintain the vehicle during the lease you will be penalized for all excessive wear-and-tear when you turn it in. Also, if you really needed to get out of your lease you can buy out of the lease if you can get the financing or you can get someone to take over your lease. Of course, they will have to qualify.

Vehicle Warranties

The average new car warranty is 36 months or 36000 miles, which ever comes first. It is not recommended that you enter into a 4, 5 or 6 year lease contract because they are not economical. Even with a four-year lease it is common for the residual to be higher than the actual value of the vehicle at the end of the lease which makes it very hard to refinance. If you are like a lot of people you can lease a new vehicle every 2 to 3 years and never have to buy an extended warranty. The only time it would be beneficial to buy an extended warranty is if you knew you were going to buy the vehicle outright at the end of the lease.

Gap Insurance

Gap Insurance is basically insurance coverage on the difference between the actual value of your vehicle and the balance you owe on the lease including the residual. This kind of protection is needed in case your vehicle is involved in an accident and is declared a total loss. Gap Insurance is important especially for people who lease vehicles. The lease on a vehicle is actually designed for the balance owed to be upside-down in relation to the actual value of the vehicle until approximately the end date of the lease term. At this time the residual should fall in line or be equal to the vehicle's actual value. Gap Insurance is good for purchase financing as well. The gap is not as large as in leasing, but you still stand the chance of having to put out a great deal of money.

Final Advice

Remember, there are two main factors you must consider when you are thinking about leasing an automobile. The first is how long you intend to keep the vehicle and the second is how many miles you travel annually. If you intend to keep the vehicle a maximum of three years and you only average 15,000 miles a year, then you should definitely consider leasing. If you want to keep the new vehicle for more than three years, you should consider purchasing.

When you lease a vehicle, you very rarely have to put any money down, so lease a new vehicle every two to three years and you won't owe any money on the old vehicle, plus you'll never have to buy an extended warranty. Also, you will have spent a ton of money less for each vehicle than if you had purchased them. If you want to keep a vehicle longer just buy it at the end of the lease.

Remember, don't let the dealer try to sell you on the basis of payments. Negotiate on the price only and when you have agreed on the price then tell them you have a trade-in. When you have agreed to your trade-in value then tell them you want to lease the new vehicle. Now you know what to do from here. Also, dealerships have a tendency to quote lease payments without the monthly tax. This makes a big difference in the monthly payments. If you don't control this you will be sadly surprised when you go into the finance manager to sign the paperwork. One more thing - when you are signing the lease contract, be sure to verify that the trade-in value you have agreed upon is actually deducted from the capitalized cost. Otherwise the dealer could wind up purchasing your trade for pennies and you would never know.

Visit My site http://www.autopurchasesecrets.com for more free information on the secrets the dealerships don't want you to know.

About the Author
Brad spent thirteen years in the Automobile business, specifically auto sales and worked for several Dealerships. He held positions from Retail Salesman up through New Car Manager and Fleet Manager. You can visit and communicate with Brad at his website http://www.autopurchasesecrets.com
Published At: www.Isnare.com
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Auto Loans and Auto Refinance Loans After Chapter 7 or Chapter 13 Bankruptcy

It's no secret that bankruptcy takes a toll on your credit score. Your credit score also known as your FICO score is a number between 300 to 850. A 300 FICO score is the lowest FICO score that you can have. The higher your FICO credit score, the better.

A person with a credit score above 670, is considered to have a good credit score and can therefore apply for car loans, mortgage loans, personal loans, debt consolidation loans, etc, with no problems. In addition, people with good credit scores get better interest rates on loans than people with problem credit.

If you recently filed for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you may be worried about your ability to obtain financing for a new/used car or refinance an existing auto loan.

The fact is owning a vehicle is essential for most Americans. Whether you live in New York city or the suburbs of Houston, Texas, having your own car, means getting to places on time - especially work. You can rely on buses and trains to get you to your destination but everyone knows that you are the whim of public transportation, which can be unpredictable.

If you have a low credit score below 600 or slightly above, the best way to find a new/used auto loan or auto refinance loan, is to do your research. Simply put, take advantage of internet resources. Why waste time calling multiple auto lenders that are listed in your local phone book, when you can apply for an online auto loan and get a response in a few days or 24 hours.

Research recommended auto loans and auto refinance loan lenders, specializing in bad credit auto loans, due to bankruptcy, chargeoffs, etc.

Visit the loan resource guide at http://www.kstreetloans.com for more information about bad credit auto loans and bad credit auto refinance loans.

Sharon Listner writes about finances and conducts in-depth analysis on various consumer loan products including car loans and mortgage loans.

Article Source: http://EzineArticles.com/?expert=Sharon_Listner

Understanding Different Types Of Auto Insurance

Auto Insurance policies can be divided into different categories according to the coverage they provide. Broadly speaking there are four kinds of policies known as Collision Insurance, Comprehensive Coverage Insurance, Uninsured and underinsured Motorist Coverage policies and No Fault Automobile Insurance policy. Besides these, there are policies that take care of other needs like covering an auto loan, paying for towing expenses or paying for the cost of a rented car while your vehicle is being repaired.

The most common insurance policies are:

Collision: Any property damage caused to your vehicle due to an accident caused by any other vehicle or object is covered under this policy. The claim amount cannot exceed the actual cash value of the vehicle and is subject to any deductible.

Comprehensive: Any property damage to your vehicle that is caused by non-collision factors like fire, theft, vandalism, and even natural disasters like flood, hurricane or earthquake is covered under this policy.

Uninsured Motorist Coverage (UM) and underinsured motorist (UIM) coverage: takes cares of any injury that may result to you or to persons insured in your policy from an accident that takes place with another uninsured or underinsured driver or vehicle owner. Generally only body injuries are covered under this policy.

No Fault Auto Insurance Policy: Irrespective of who caused the accident, the insurance company pays for the medical expenses and for the loss of wages that the insured suffers on account of a collision under this policy.

Some other additional coverage that an auto insurance policy holder can buy are:

Property Damage Liability and Bodily Injury Liability: These two policies protect the insured from any claims made against him for causing damage to property including vehicle belonging to another person or for causing any bodily injury or loss of life to other individuals up to the amount mentioned in the policy.

Auto Lease Protection: is an additional protection that you may add to your collision or comprehensive auto insurance policy to take care of any gap that exists between your auto loan amount and the cash value of your vehicle.

Full Tort and Limited Tort: available only in the state of Pennsylvania allows the insured to retain unrestricted rights to bring a lawsuit against a negligent party or recover expenses incurred for certain damages.

Rental Expense: Known as Extended Transportation Expense Coverage, the policy pays for a rental car while your vehicle is being repaired or replaced.

Medical Payments Insurance covers medical expenses for injuries sustained in an accident involving any vehicle for the insured, his passengers and other parties irrespective of whose fault it is.

Towing and Labor: An additional coverage option that can pay for all necessary towing and labor costs to tow your damaged vehicle to a work shop or another location.

About the Author
Marcus Dubois is a veteran in the insurance industry, and recommends InstaQuoter to get an instant auto insurance quote. See http://www.instaquoter.com/auto/ for more information.
Published At: www.Isnare.com
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