Why Get an Auto Financing Company?

Whenever you see someone driving down the street in what seems to be everyone else’s dream car, there are those who wish they could own their own but cannot due to financial constraints. A few of them though have the capability of getting their own, but they won’t want to pay for it in one go. In such cases, professional help is needed to get through the daunting task of getting your own car.

That’s where auto financing companies come in, but they do exist in a jungle full of different companies with their own ways of doing things. Doing homework on which company you should choose comes with the territory, but some people may be skeptical about how necessary it is to make use of their services in this process. In this case, here are some of the reasons as to why you should get a legitimate auto financing company to help you with your car loan.

Established Companies are Legitimate

That statement sounds like an oxymoron, but you should understand that there are a good number of vultures among all the entities that claim to give services of assisting with car loans out there. A big part of any auto financing process is doing the homework to know which among all the companies does their business legitimately. It’s not that it’s totally a mine field full of danger, but it’s better to be safe than sorry.

A legitimate auto financing company is better than most other options because it would have all the facilities necessary for catering to your needs. Even if there are other places wherein you can get your auto financing done easily enough, a company brings along with them the assurance that if something goes wrong, they’ll be willing to help out.

Auto Loans for New Cars Can Be Less Expensive

If you’re looking to get car loans, look out for opportunities that are more common than you think. Many high risk auto lenders and financing companies offer great rates year-round for new car loans due to competition in the auto financing market, which serves as opportunity for the prospective car buyer. Such opportunities mean fast and easy approval, low rates, and so on.

The advantage that auto financing companies have in this case is that they are more certain to go through with whatever low rates are being advertised. All you really have to do is to speak up and tell them that you intend to avail of those rates, and you should be guided through the process of getting them. Just make sure that you get any sort of fine print or footnote cleared out before getting into them.

Clear-cut Rates and Downpayment Plans

Unlike with other lenders, auto financing companies are adamant about maintaining their standards, so they would have car loan plans that are way less likely to kick you in the teeth later down the line. If you go with unscrupulous lenders, you may get changes to previous terms at random, which is risky and very discouraging.

Legitimate auto financing companies are generally more trustworthy and will have your best interest in mind, so long as you prove to be trustworthy as a client as well.

There are Companies that Help Customers with Bad Credit

Bankruptcy is said to be the lowest that anyone can go financially, but it doesn’t mean that there’s no hope for any attempts at coming back. In fact, one of the first things that people do to get back on their feet is to regain their mobility, which is being able to have a car for their purposes. That’s when car loans come in, and auto financing companies help with that process in many ways.

A legitimate auto financing company understand how to work with people who have bad credit, as opposed to a lot of the shady ones that you may encounter online which put up schemes that are definitely too good to be true. There are quite a few legitimate car load opportunities online, but you’ll have to use your better judgment to decide on whether you go for them or turn towards the more traditional style company that offer the same services.

Bad Credit Auto Financing Companies Understand Your Pain

Around 98% of all auto financing companies base their decisions on the borrower’s credit score to give approval for their services, which is logical at most times. The 2% that is composed of bad credit auto financing companies though get into the business knowing fully well that they willingly deal with borrowers who are not in the best financial shape.

They look past credit scores and are more meticulous with the borrower’s current situation and foreseeable future. They are much more hands on, which is something that could help people who are having difficulties.

Credit Reviews Done Comprehensibly Yet Simply

Car loans are not without the credit review, and it’s definitely true for these auto financing companies that have a vested interest in making sure that their clients will complete their end of the deal within the alloted time frame. The difference though is that they keep things as smooth and simple as possible in order to not confuse the clients and make the process quick and smooth.

The approval process in these things is quite simple in principle. All you really need to get approved for any credit is having a way to repay the debt, which is common sense for the most part. If you can’t prove that you have a source of income, then you can’t get approved for credit. Anyone should be able to understand that concept.

Good Companies Have Both Online and Offline Services

It can’t be denied that online services are very convenient, while offline ones are more established and sure-footed. In this case, good auto financing companies should be able to provide the best of both worlds in order to give clients of different backgrounds some solid options for their auto financing needs.

With online services, they should have easy-to-follow references and live support staff to answer your questions and show you what needs to be done. As for offline, you should expect customer assistance and simple step-by-step procedures to get your auto financing done with them without needless hassle.

 

The DO’s and Dont’s in Auto Loans for 2014

In a perfect world, you would not have to take a car loan just to buy your dream car. You would not have to worry about haggling with the dealership for a good price because the salesman would know that you have the money to buy a vehicle and you would easily take your business anywhere you want to when you feel that you are not being given a great deal. In a perfect world, you would not have to think about paying your debts and monthly dues because you would have paid your dream Porsche or Audi with cash. Fortunately, although most of us are not able to this, there are trustworthy companies online offering bad credit auto refinancing and loans.

However, in a real world, not all people have enough money to get cars and pay them in cash. Hence, some people would have to rely on taking out an auto loan just to get a vehicle. There are plenty of auto financing options available for shoppers of new and used cars. If you are planning to take out a loan this 2014, you need to know the various do’s and don’ts when taking out or applying for a car loan to make sure that you are getting a good deal.

Get Pre-Approved for a Car Loan

Although some car shoppers might consider getting a pre-approval for an auto loan as an unnecessary step in getting a car, taking the extra time to get pre-approved for an auto loan is a crucial step to make sure that the loan you are being offered is the kind of financing that is suitable for you. Getting a pre-approved car loan in 2014 allows you to simplify the negotiation process with car dealers. When you are pre-approved, you can ask on the actual selling price of the vehicle as if you have a check that is readily available since you will not have to worry nor think much about the loan term, interest rates, and down payments.

More importantly, getting pre-approved for an auto loan allows you to stick strictly within your budget. Having a pre-approval notice gives you a solid idea on how much you can actually spend for a car. For example, if you have been pre-approved for a $50,000 loan, you can start searching for a new or used car that is a little less than that amount since you also need to take into account other fees, such as taxes.

Never Let a Car Dealership Arrange an Auto Loan for You

Although most new shoppers of brand new and used vehicles are inclined to think that the car dealership are responsible for setting up the auto loan for their potential clients, it is highly recommended that when shopping for a car, you have to qualify for independent financing first. Before discussing terms with a car dealership, getting pre-approval for a car loan somewhere else is important to increase your status as a car buyer. Being pre-approved for an auto loan will let the car dealers know that you are the kind of car buyer who knows how to negotiate the price of the vehicle.

In addition, qualifying for an independent financing also allows you to shop for an auto loan with the best interest rates. Although there is no exact guarantee that you will be given the lowest interest rates for your car loan once you are pre-approved for one, the benefit of getting a pre-approval is that you at least have a basis to compare the interest rates that car dealers will offer. Whether or not car dealers offer you a rate that is lower than your pre-approved interest rate, you at least have an option to take your business somewhere else to find a car that you can afford.

Never Settle on Just One Lender

Even in this economy, there are still several auto loan options that are available for shoppers of new and used vehicles. If it is your first time to apply for a car loan, it is crucial that you shop around for loans to make sure that you are being given the best type of financing. Do not just go to one lender and settle with the financing scheme that it provides.

Car loans are available from brick-and-mortar-lending institutions to online lenders. You can actually visit traditional banks and credit unions to inquire about their auto loans. In addition, you also have the option to discuss auto financing with online lenders. Shopping around for an auto loan is a must for car shoppers since the requirements and interest rates vary from one lender to another. In addition, with the tight competition among lenders these days, credit for vehicle loans is mostly readily available for many car shoppers.

Always Check Your Credit Score

Your credit score is an essential factor when taking out a car loan because it is the primary indicator of your credit worthiness. A credit score is a three-digit number that ranges from 280 to 850. With a good credit score, which is typically from 660 or higher, you can save hundreds and thousands of money each year when you take out a car loan. Meanwhile, when you have a low credit score, there is a likelihood that you would have to pay more for a 60-month car loan. Your good credit score can save you money on car loan payments since it can help you get a lower interest rate as compared to having a low credit score.

If you have not checked nor seen your credit score in a while, it is time to do so, especially if you are planning to purchase a car through financing this year. Every consumer is entitled to get one free copy of their credit report every year. You can get a copy of your credit reports from any of the three main credit reporting bureaus—Equifax, Trans Union, and Experian—each year for free through AnnualCreditReport.com.

Whether you are getting a new car or a used vehicle through financing this 2014, it is important to keep in mind the abovementioned tips in order to get the best interest rate and type of financing that you can afford. Purchasing a car should be an informed and intelligent decision; hence, it is important to plan your auto loan application ahead of time to have a successful car purchase.

 

Money-saving Tips for Your Car’s Maintenance

If you have purchased your car through financing, another set of expenses that you have to worry about aside from the monthly amortization fee is the costs for repair and maintenance of your vehicle. The maintenance costs for a vehicle is expensive, yet it is something that you have to set aside on your monthly budget in order to make sure that your car is in top shape.

As a driver, one thing that can bring you a huge pain in the head and in your pocket is when you need to have your car repaired. Having a car repaired after an accident on the road is a time-consuming and expensive affair, and it is something that many drivers dread. However, you still need to go to a mechanic and fork over a wad of cash to get your car into its running condition again.

If you are planning to tighten your financial belt this year, here are some great tips to help you save more money on your car’s maintenance and repairs.

Learn How to Do DIY Repairs

As a driver of your own car, it is only appropriate that you learn to take the DIY approach when it comes to performing simple repairs and maintenance for your vehicle. Learning to do the work yourself will not only save you thousands of dollars each year, but also spare you from the hassle of dealing with a mechanic that you cannot trust.

Some of the basic repairs that you can do without the need to seek for professional help are replacing your own car’s fuel, checking your own fluids, and replacing your windshield wiper blades. You can also change your own fluids, replace parts such as breaks, fuses, rotors, and battery, as well as change your vehicle’s air filter.

All you need to have when planning to do DIY repairs on your car is to have DIY knowledge on car repairs and maintenance. There are tons of guide articles online and even books for DIY repairs that can help you learn more about fixing your vehicle on your own. Moreover, you also need the necessary tools to fix your own car. Lastly, you need to find a flat and safe place where you can jack the car up or a secured area where you can lift the vehicle safely in the air so that you can work on it.

Consider Getting a Code Reader

Speaking of doing DIY repairs on your car, another way to save more money on car maintenance is by doing your own diagnostics by getting a code reader. OBD-II or On-Board Diagnostics scanners are used on most modern cars and are widely available lately. You can easily use them at home or by using your smartphone to check the problems that your vehicle has.

The scanners use beeps and codes to diagnose issues and help you perform diagnostics on your vehicle. There are several OBD-II scanners and code readers available online that you can get at a very reasonable price. Another option is by downloading a smartphone app and using a Bluetooth dongle that lets you decipher diagnosis and check your vehicle’s health at a timely manner.

Search for Good Mechanics and Auto Repair Shops in Your Area

Most of the time, some vehicles are not covered by a factory warranty, so drivers are left to their own devices to find an auto repair shop and mechanic who can fix their vehicles. When your car is having issues, you do not have to take it to its dealer for service especially if it does not have a warranty.

Search for reputable auto repair shops and good mechanics in your locality. Ask your friends, work colleagues, and relatives if they happen to have a mechanic or a shop that they trust. Never underestimate word-of-mouth marketing because it is the best way to get instant reviews and feedback on auto repair shops and mechanics in your place.

Call or visit the shop personally to see how they repair vehicles before having any work done on your car. The vehicles that they are repairing should still be in relatively good condition, and their parts should not be lying around abandoned for ages. Check how they treat their other customers and how they work on the vehicles as well, so you will have an idea what to expect from the shop.

When checking for auto repair shops in your area, make sure that their mechanics and technicians are certified in one or more car repair classifications. Having certifications from the Automotive Service Excellence is a good sign that the shop hires industry-trained staff. Do not be hesitant to ask questions about their certification.

Moreover, if they are not certified by ASE, you can still ask them about the specific training that they have on car repairs, so you can be assured that you are entrusting your car to people who are equipped with the right knowledge about car repair and maintenance.

You can also inquire about their specializations, such as whether they do specific repairs only or if they only work on certain car models. Moreover, you can also inquire about remanufactured parts and how long is the warranty for those parts. If their staff or mechanics are comfortable about using refurbished parts that can perform just like brand-new parts, you will be able to save more money and get a great warranty as well even on remanufactured spare parts.

Shop Around to Compare Costs

Once you have auto repair shops and mechanics on your list, the next thing to do is to shop around and compare costs. Call or visit mechanics and vehicle repair shops and inquire about services and prices. Get quotes from as many auto repair shops and specialists as possible so that you will have a good idea of which shops and technicians offer the best price that suits your budget.

Moreover, do not hesitate as well to let them know that you have been visiting other auto repair shops. Do not be afraid to negotiate as well on any ongoing specials and ask for discounts on labor fees. Most of the time, they will try to negotiate with you so that you can get a good price for your car maintenance if they really want your business.

 

Knowing the Risks in Car Financing

Purchasing a new car is important to help people get to work, to visit relatives who live at far-flung areas, and to go to other areas that they visit on a daily basis. Deciding on buying a car is also crucial if you have a family and have kids that you need to take to school every day when commuting is not an ideal option. However, not all people are capable of purchasing a car in cash, so they are opting to take auto loans instead to get the car that they need.

Aside from knowing the benefits of applying for a car loan instead of paying for one in full by cash, you also need to know the downsides of taking out an auto loan to help you make an informed decision, especially if it is your first time to apply for one. Like virtually any type of loan, there are risks to be considered when getting a car through financing.

This article outlines some of the risks you may encounter when financing a car through a loan. It is crucial to be informed of such risks so that you will have an idea on what to expect just in case your auto loan gets out of hand.

Paying High Interest Rates that You Cannot Afford

Because you are getting your car through financing, naturally, you have to expect to pay the dealership, lender, credit union, or the bank for your new car with an interest rate included. Paying interest rates on top of the principal amount of the vehicle inevitably raises the total cost of the vehicle above its true market price.

When getting an auto loan, the interest rate that will be offered to you will vary due to different factors. The economic state, the condition of the lender or bank, and most importantly, your credit worthiness will determine the interest rate that you need to pay in addition to the principal amount of the vehicle.

If you do not have a stellar credit report, you may still get a loan, but it will be one that has a high interest rate. You are being given a relatively high interest rate for your auto loan because your credit worthiness is not exactly ideal for most lenders. A high interest rate eventually means having a huge monthly payment.

You can speak with your lender to give you a longer time frame for your loan. For example, you can ask your lender to make a 15-month car loan into a 30-month car loan so that you can afford your monthly dues. However, the longer the time period, the more total interest you will have to pay over the duration of your auto loan.

Lender Repossessing the Vehicle

If you cannot pay the loan in its entirety, the worst thing that can happen is that the vehicle will be repossessed by the lender. You might still pay for a car you no longer own if the lender sold the car at an auction. The difference between the selling price and the balance on your loan is the amount that you still have to settle.

Vehicle Depreciation When Deciding to Sell the Car

Time is not exactly your best friend, especially if you are a car owner. A car’s depreciation phase starts the moment you first started driving it out of the car dealer’s garage. Car depreciation is basically the gap between the amount you spend when you bought the car through cash or through financing and the amount you can get back if you decide to trade or sell your vehicle. Car depreciation matters especially when you decide to sell your vehicle in the future in order to pay off the loan in its entirety.

Most of the time, people who sell their used cars get a lesser amount from the buyer, which may not be enough to pay off the loan. For example, if you take out an auto loan for $30,000, but the market value of your car has depreciated to $20,000, you still owe your lending company $30,000. Even if you managed to sell the car for $20,000, you still need to fill the total amount with your own money to pay your loan.

This means that even if you have sold the car, you may still need to add some of your money in order to pay off the loan entirely. Remember that you cannot transfer the title of your loaned vehicle to another person or business unless your current auto loan is completely paid off. You also need to let your lender know about it so that they can be involved in the logistics of the vehicle transfer.

When Your Car Insurance Totaled Your Vehicle After an Accident

Having the vehicle totaled by the insurance company in an accident is the worst thing that can happen to any car owner. What is even worse is when car owners are unfortunately still left with a loan to pay off completely for a car that they cannot use anymore.

Remember that even when you have your car insured, insurance companies will only pay the fair market value of your vehicle especially when they consider it a “total loss” after the accident. Car insurance firms will deem a vehicle a “total loss” when the amount to repair the car is way higher than its fair market value.

You need to keep in mind that a car’s fair market value is the amount of the vehicle prior to the accident, but mileage and depreciation are also considered when determining the vehicle’s fair market value. Unfortunately, you cannot protect yourself from owing money on a totaled car especially when the total amount of your loan is higher than the car’s current fair market value.

For instance, if the car’s fair market value is $5,000 and the cost of the repair is $10,000, the insurance company will consider it as a “total loss” if it is completely wrecked. The insurance firm will then issue you a settlement fee that is equivalent to $5,000. If the amount of your loan is $15,000, you will still owe your lender an amount of $10,000 for a vehicle that you can no longer use.

Buying a new vehicle or even a used one is an expensive feat, so you really need to see the dangers you might encounter when taking out a car loan to ensure that you will be completely ready for it financially and mentally.

 

5 Things to Consider Before Getting an Auto Financing Company

Even with the economy heading into a more progressive state, some people still do not have enough money to purchase a car in cash. Most people these days still have to prefer taking out a car loan in order to drive and own their dream vehicles, let alone any car that they can use personally. There are several auto financing options that are available for people who have varying vehicle needs.

When taking out a car loan for the first time, there are several factors that you need to consider before consulting with an auto financing company. If you are planning to deal with an auto loan company to get your dream vehicle this year, you need to start planning and setting your budget now in order to ensure that purchasing your chosen car would be a success.

Determine Your Budget

If you are considering applying for an auto loan, you need to determine the budget you are going to set for financing a vehicle while shopping for your dream car. Most of the time, the specific car you have your eyes on is something that can be way over your budget, so you need to make sure that you only choose the car that has a price that will not break your bank account.

When determining your budget for the car loan, you need to consider the monthly car loan dues that you need to pay. In addition, you also need to take into account the total monthly cost that is needed in order to operate the car. These total cost will most likely include the fees for your car insurance because obviously, every car owner should have one.

Moreover, you also need to include other maintenance and operational costs such as your monthly gasoline expenses and possible car repair fees. A good way of setting up a budget for a possible car loan is by allocating 20 to 30 percent of your monthly household income for this purpose. This way, you can get a car loan that you can afford without sacrificing the budget that you have allotted for your other crucial household expenses.

Decide On What You Should Drive

Most of the time when making a big car purchase for the first time, you want to get the nicest vehicle that you can possibly pay for. However, you also need to determine if you are going to finance a new car or a used vehicle. When shopping for a car, you might want to take a look at both new and used cars that are within the budget that you have allotted for your car loan.

There is an advantage and disadvantage when choosing between a new car and an old car. Taking out an auto loan for a new car gives you an assurance of a full warranty; however, there is also a possibility that you will also get less car features for your money. On the other hand, when you take a car loan to purchase a used car, you could get the car model that you want that is within your budget. However, the downside of financing a used car is that you might not gain enough information about the car’s history, and you could also be given a shorter warranty period for your chosen vehicle.

Check Your Credit Score Beforehand

Your credit score is a crucial element when you are planning to take out a loan because it is one of the many factors that determine if you are credit worthy or not. If you have not seen your credit report in quite a while, checking it before applying for a loan is a good idea so that you will know if you have good or bad credit. If you have issues with paying debts before, it will most likely reflect on your credit score. As a result, you might have a low credit score, which in turn will make you unqualified for the auto loan you need to purchase the car that you have your eyes on.

Although you can still get credit even when you do not have a stellar credit history, it is still recommended that you manage your finances responsibly in order for credit reporting agencies and potential lenders to know that you can handle credit properly. Having a good credit score will help save you more money when you take out a car loan because most lenders offer a low interest rate for people who have stellar credit.

To check your credit report, get a free copy from any of the three major credit reporting agencies such as Trans Union, Experian, and Equifax. Every person is entitled to one free copy of their credit report each year, so you should not have any excuse not to monitor your credit score yearly.

Get a Pre-Approval

For many people who are taking out a car loan, getting a pre-approval for a loan may seem like an unnecessary task. However, it is still a crucial step especially for you are dealing with an auto financing company for the first time because it helps you shop for a vehicle with a pre-determined budget. Therefore, you are sure to get a car loan that you can afford to pay on a monthly basis since you already have a solid idea on the maximum allowable credit that you can use to purchase a vehicle.

In addition, getting pre-approved for a car loan makes the negotiation process easier since you already know the loan amount that you are entitled to. With a pre-approval for a car loan, you can negotiate the price of the car with a dealer to make sure that it will fit your budget.

Find an Auto Financing Company You Can Trust

Shopping for a car loan should always be a time-consuming affair because purchasing a car is an expensive feat. Hence, you really need to take your time in finding an auto financing company that has a good reputation in the lending industry. When searching for a creditor that offers auto loans, you need to search for reviews about the lending company to know the experiences of other borrowers who have dealt with them in the past. Moreover, you can also ask your friends, relatives, and work colleagues about auto financing companies that they trust, so you can have credible sources of information about the available auto loan businesses in your area.

It is crucial to find an auto loan company that has been in the lending business for years and has a respectable reputation in the industry, so you can be ensured that you will not get ripped off when you take out a car loan.