Many people have begun taking advantage of refinancing their auto loans, but the question those who don’t participate often ask is “Why?” There are many reason people find benefit in participating in this process, and after you read this article, you may understand why. So to introduce to auto refinance loans, we will look at why people do it, as well as the perks.
What are Auto Refinance Loans?
Auto refinance loans are loans taken out by a person who already has an auto loan; however they are interested in refinancing their loan for new interest rates. When you take out one of these loans, you allow the financial institution to pay off your current loan then begin paying the new financial institution for the money that you owe.
Why do People Refinance their Cars?
There are several reasons that people choose to take on auto refinance loans. One is that they took an offer from a dealership that they were not particularly happy with, however, the dealer offered so many rebates and rewards that they could not turn down the deal. Now that time has passed, they want to get out of working with the dealership and choose to refinance to remove them from the equation.
Another reason people choose to refinance is because their credit has improved. If you bought your car when your credit was subprime, you may have been subjected to high interest rates. However, over a couple of years, you were able to pay a few things off and, in turn, raised your credit score. As a result, you are eligible for higher interest rates. It is only natural to want to take advantage of this opportunity, so many refinance to begin paying a lower car note.
Some people take advantage of refinancing because they are interested in buying a car that they are currently leasing. Many dealerships are not interested in working out a way to help you buy the car because they make more money by leasing it. However, if you come to them with cash, they will release the car. So many people take out loans for the amount owed on the car, which enables them to purchase it. Then they simply pay back the loan to the financial institution from which they borrowed.
While There Are Perks, Be Careful
The perks of refinancing your car are many (most of which are listed above). It gives you a great opportunity to get out of a situation you were not happy with - and that is never a bad thing. Also, it gives you a chance to help improve your credit by potentially providing you with a lower car payment that will ensure you don’t miss a month - showing you were in good standing for the term of the loan is a great thing!
It is important, however, that when taking out auto refinance loans that you don’t leave a bad situation for one that is worse. In other words, don’t assume the interest rates and terms of the new loan will ensure a better outcome for you. Make sure that you read all terms and conditions of any loans you consider because any establishment has the ability to take advantage of you. As long as you do your homework and proceed with caution, you are likely to have great success with auto refinance loans.
Jeffrey Meier at Jam727 Enterprises at http://www.thearticlehome.com blog offers even more detailed information on a wide variety of topics.
October 29th, 2008
These days buying cars is all the rage and for this car one needs lots of money. So, to fulfill the desire, people are taking loans. But the point in question is that how one can get the car loan and what are the steps that one should follow, while taking a loan. So, here are some important tips to get the car loan without any difficulty.
First of all, one should try to search on the internet. There are a number of sites which can give one the complete information about car loan financing. One can use internet for getting car loan financing irrespective of credit record. Even for the bad credit car loan financing, there are lots of sites to get information.
Secondly, one can finance used or new car by using a car dealership. If a person works with car dealerships, he is able to get the car loan to some extent. If one’s credit is not meeting the requisite criteria, in such situation it would be difficult for lots of dealerships to finance the car loan.
Therefore here are some important tips that one should remember while financing the car loan. First of all, one should be confirmed about all the promises which they are making are true or not. Generally, zero-percent financing attracts people a lot, but it is only for those persons who has perfect credit scores. So, be careful while taking the car loan.
One should do research as much as one can. Researching is also the best way to know more about car buying and car financing. With lots of researches one becomes very informative about which one is most negotiate well. With all the requisite knowledge and information, one can overcome the persuasion tactics of the car loan lenders.
One should never hesitate to seek another car loan option and walk out of the dealership. This is because of the fact that there is a great competition between dealerships and the financial institutions for the borrowers to get their car loan financed from them. This helps the customers to take a right decision. But if one is having bad credit history, then one should be very circumspect, because it is possible that dealers and lenders will make alluring commitment, but their intent is quite different. So, while taking a car loan, one should be very careful and weigh up everything correctly.
NetCars is one of the UK’s leading Car loan websites. First established in January 2000, its mission is to become the number one site for Car Leasing and car loans searches.
October 6th, 2008
People all over the world have a need for financial aid at some point in their lives. Now, more than ever, the global financial slump pulls down with it the purchasing power of many individuals all over the world. Acquiring a rather pricey personal necessity such as a car can prove to be a rather difficult feat these days. Credit turns out to be the most viable option in such a case.
However, everybody knows that obtaining a car loan is not easy. Most loan companies look for good credit standing to be assured that they get their money back. But not a lot of people have decent credit history.
A guaranteed car credit deal, as the term implies, assures of approved car financing to clients who are currently employed UK residents and who make moderate down payments regardless of an individual’s credit history. In these cases, finance companies and dealers team up to finance loans that are usually too dicey for banks or other lending institutions to shoulder by themselves at reasonable rates and terms. Likewise, vehicles are assets that lenders can take legal action on, thus they agree to grant guaranteed car loans.
Guaranteed to Buy You a Car
Interest rates for guaranteed car finance vary depending on a patron’s credit score. A satisfactory credit standing almost always indicates lower annual percentage rate (APR). However, poor or non-existent credit history will most likely result to excessive interest rates. Yet it still ensures a patron of going home with a new car.
Car Loan Applications Through the Internet
It is relatively easy to obtain guaranteed car finance. The internet alone is teeming with car loan deals for UK patrons. Online loan applications are often processed within hours upon submission. Many online companies offer free service for receiving loan applications applied through the internet and submitting them to associate lenders and dealers all over UK. This increases the likelihood of buyers to obtain approval of their loan application.
Some internet companies may likewise provide discounted rates for online applications. There are lenders that provide credit limit that customers can use to purchase any vehicle of their choice from any dealer that they prefer.
Improves Credit Rating
Obtaining a guaranteed car finance can also improve a person’s credit standing. Over time, as a client agreeably complies with payment terms and due dates, his or her credit score subsequently improves. A satisfactory credit score may also qualify him or her for refinancing should he or she opt to avail of one in the future.
Flexible Offers for Customers
In general, car dealers treat guaranteed car finance customers just like any other by allowing them the flexibility to trade in their vehicle any time during the agreed loan period. This makes it easy for clients to adjust to sudden needs brought on by unexpected changes in circumstance.
Finally, it is possible to land a good deal for bad credit through guaranteed car financing. Credit seekers are advised to be prudent in choosing the best company that will provide for their needs. Having a list of prospective lenders and the deals that they offer will help customers to decide on the best company that can provide for their needs.
Max Morgan is a finance writer who covers many areas including loans, mortgages and car finance. He currently advises on guaranteed car finance for a specialty website. He also assists those with a bad or adverse credit history who want to apply for bad credit car finance
October 3rd, 2008
By Andrew HousserGas prices are heading for the moon, and our vehicle choices are in the spotlight. Are you paying too much for gas? Driving a gas-guzzler? Worried about pollution? Or just hoping your four wheels can keep on rolling to get you to work and back? Whatever your vehicle situation, check out these suggestions for getting the most from your next auto.
- Watch out for “we’ll pay off your trade” offers. A dealer who makes this offer will actually just add the amount of the loan on the vehicle you will trade in to your new vehicle loan. If your car has lost value quickly, or if you have had a new car for less than a year, the loan amount on your car may be more than its trade-in value - meaning you would you could be facing a big chunk of debt added to a new car loan.
- Go low. At its most basic, a vehicle is a tool to transport you from place to place. It should work reliably, be safe, and have payments that fit within your budget. While society sometimes links cars with status, think about what you could do with the price difference between an older car and a BMW. Saving $200 a month on a car payment could add $14,400 to your nest egg in seven years - nearly enough to buy your next car outright.
- Beware the hybrid temptation. Before you jump on the hybrid bandwagon, be sure you can afford it. All hybrid vehicles get better gas mileage than the same model with traditional technology, and are better for the planet. But they typically cost $3,000 to $6,000 more than their conventional counterparts. Some analysts suggest that hybrid buyers will only break even on the costs over the lifetime of the vehicle. If the cost is a strain, look at a smaller car that gets good mileage. For thousands of dollars less, you will still be saving money on gas and helping the environment.
- Consider after-purchase costs. While researching your vehicle, call a few insurance agents for different companies and get their estimates of costs to cover the vehicles you are looking at. Some features and some vehicles cost more to insure. Check a site such as Edmunds.com, which presents “cost of ownership” figures that take into account maintenance and repairs.
- Compare and negotiate. When it comes to a car purchase, “slow and steady wins the race.” Carefully research the cars that interest you, test drive them, and compare book prices and local offers. Contact several local dealers and ask them to fax or e-mail you their best price on your chosen vehicle, and consider online auction sites such as Ebay for another way to shop around.
- Use a broker. Another option to relieve the uncomfortable pressure of car sales is to work with a broker. A broker negotiates the car deal for you for a flat fee. Because the broker typically obtains a good price, the total cost to you is usually no more than you could negotiate yourself. You also avoid the hassle of negotiations. If you are a member of a credit union, warehouse or automotive club, ask club if they offer similar services.
- Check your credit. Before buying, check your credit report and credit score. If below average, you will pay higher interest rates. Taking a few months to pay bills on time can build up your score and get a better deal.
- Review financing options. Paying cash for a car is the best value — without interest payments, you keep your money. But if you have not saved up for a car, take the time to compare financing. Usually, your own bank or credit union will offer the best rates. But those with good credit might be able to benefit from special low- or no-interest financing from the dealership. Whatever you choose, look at several options and make your decision carefully, not under pressure from the sales team at the dealership. Go home and sleep on the deal if necessary.
- Do not burn cash. Once you have your car, refrain from driving aggressively — it wastes gas and essentially burns up money. Basic frugal moves like combining errands, carpooling or taking public transit, or walking and biking when possible can produce substantial gas savings over time.
A vehicle is a significant and important purchase. With the right planning and consideration, the choices you make will not drive a car-sized hole right through your budget.
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 Andrew Housser is a co-founder and CEO of Bills.com, a free one-stop online portal where consumers can educate themselves about personal finance issues and compare financial products and services. He also is co-CEO of Freedom Financial Network, LLC, a national consumer debt resolution firm that has served more than 7,500 clients and manages more than $250 million in consumer debt. Housser holds a Master of Business Administration degree from Stanford University and Bachelor of Arts degree from Dartmouth University. |
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August 5th, 2008
You know the economy is bad when a house given away for free by ABC’s “Extreme Makeover: Home Edition” is headed for foreclosure. But even though we hear a lot about the mortgage mess, there’s also big trouble afoot in the auto-loan industry.
Turns out, the big three automakers in Detroit want out of the once-lucrative car-leasing business. Last Friday, Chrysler announced it would no longer offer leases for its vehicles. The move represented a sea-change in how the automaker approaches financing.
On Tuesday, both Ford and General Motors leaked word that they, too, were backing away from leasing. Ford suggested that it might stop leasing only trucks and SUVs; GM says cryptically that it is going to make “adjustments” to its leasing regime.
Since the early 1990s, leases have been a common arrangement allowing consumers to take possession, albeit temporarily, of cars they typically couldn’t afford to buy outright. Automakers were thrilled by the lease because it (1) allowed them to expand the pool of potential buyers to include people who couldn’t afford traditional loans; (2) created constant demand for new cars, since leases normally expired after two to three years; and (3) was tremendously profitable: After charging someone rent on the car for a couple of years, the automakers would take the car back and sell it on the secondary market for a hefty profit.
To get a sense of how important leases are, until this week, they accounted for 20 percent of new-car sales for the big three automakers. For now, buyers will still be able to make lease arrangements through third-party creditors, but many of those lenders, including Chase and Wells Fargo, seem to be turning away from leases, too.
What’s going on? A few things, all at once.
First, there are gas prices. Always remember that economic events ripple outward — and $4 a gallon for gas creates a lot of ripples.
One ripple: Over the last year, the price of used full-size SUVs is down 27 percent; the price of used pickup trucks is down 25 percent, according to a recent report in the Wall Street Journal.
Remember that the profitability of the lease depends on the automaker’s ability to resell the used car. So those big price declines on the used market have meant huge losses for the automakers.
Pull back a little, though, and the entire financing side of the auto industry is shaky. Just as in the mortgage world, qualifications for auto loans relaxed earlier in the decade. About $575 billion in new- and used-car loans are made every year and as the downturn set in, the delinquencies began to pile up. Toward the end of 2007 they were at the highest levels since 1992, and it looked as if the auto-finance world might be facing its own crisis.
The bad news is that U.S. automakers may be in a no-win situation. Keep leasing SUVs and trucks, and they’ll keep losing money on the re-sales. But if they cut out leases, a large chunk of customers will no longer be able to afford a new car. And right now they need every buyer they can get their hands on.
Chrysler’s domestic sales are already down 22 percent this year. Eliminating leases that now account for 20 percent of new sales can only hurt demand, creating a vicious cycle.
The good news is that the market for auto loans seems to have stabilized, at least for the moment. The first-quarter delinquencies from 2008 showed improvement over the last quarter of 2007, declining by 18 percent. But even this was a mixed bag: Delinquencies from dealer financing fell, but delinquencies from direct financing — that is, banks and other lenders — rose slightly.
And the further good news is that unlike the housing market, irresponsible lending and borrowing in the auto market shouldn’t directly affect more responsible consumers. Of course it’s the indirect effects that’ll kill you. Let’s see where these ripples go.
Note to readers:
Ellis Henican’s column will return.
Last is a columnist for the Philadelphia Inquirer. Send him e-mail at jlast@phillynews.com.
August 5th, 2008
