By Andrew Housser
Gas 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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You may need a private party auto loan if you don’t plan to buy your next car from a dealer and don’t have the cash. The good news is that auto loans for private party car sales are available in the event a neighbor or family member has your dream car for sale that you want or even if you see a ad in the newspaper or online. In many cases you can go get a bank loan or go to a local credit union however it is especially easy to find private party financing online where there are numerous competing lenders that will be glad to meet your needs.
You can take advantage of the biggest benefit of a private auto loan, talking to the current owner, in a person to person auto sale. The maintenance, accidents and all other aspects of the cars history can be discussed with the seller, which is a distinct advantage from going to a dealers lot and buying a car. A secondary benefit is that private party auto sales do not have the dealer markup, enabling you to buy the same car you see on a car lot for less. Plus you can even start rebuilding your credit. For instance, paying off a bad credit private party auto loan will be good for your credit history .
Of course, even for private party used car loans, an auto loan application will have to be filled out. These are made simpler online and require a minimal amount of personal information and time to complete these include the cars year, make and model and the mileage on the car. Also, the name and contact details of the seller/owner of the will be necessary.
The process of acquiring private party car loans is simple. Online you will go through a broker that will put you and lenders in contact. In some cases you will, with the submission of one application, be put in touch with multiple auto loan lenders.
There are minimum qualifications that must be met in order to receive auto loans for private party car sales. Meeting the qualifications for private party auto loans, for most, should be no problem.
These requirements include (but are not limited to depending on the lender) the following:
1. Legal age of 18 years or over.
2. You have a minimum income of $418 per week or $21,736 annually.
3. You have lived at the last 2 residences that on the application for more than 6 months.
4. You can show that for the last two employers you have been employed by them for more than 6 months.
5. You have no open bankruptcies.
6. You must have a valid social security number.
Be clear, your re-payment responsibility for a private auto loan for a person to person auto sale is identical to any other auto loan financing. In the event you see your fantasy car for the perfect price for sale by a private party, a private party auto loan may be all you need to drive it.
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