upside down car payment calculator

If you decide to apply for a vehicle loan before you have found the When you are “upside down” on your auto loan, you owe more on your. The danger with this route is that you are still responsible for whatever you still owe on the vehicle. If you're upside-down on your auto loan, you aren't. A down payment is the amount of money you pay upfront when buying upside down in a loan, where you owe more than what the car is worth.
upside down car payment calculator

: Upside down car payment calculator

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Upside down car payment calculator

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Auto Loan Refinancing Calculator

This calculator will help you to figure if you should refinance your current auto loan at a lower interest rate. It calculates monthly payments and net interest savings on your automobile loan. Current local auto loan refinance rates are published in a table below the calculator.

Current Local Auto Loan Refinance Rates

Your Guide to Auto Loan Refinancing

No doubt you've heard about the benefits of refinancing a home loan. Frankly, it's pretty hard to avoid those mid-afternoon and late night television ads championing the benefits of home equity loans, and promoting the financial advantages of refinancing an existing mortgage. But did you know that you can also refinance an existing auto loan?

Auto loan refinancing offers many of the same benefits as home loan refinancing (albeit on a somewhat smaller scale), and under the right circumstances can be a real boon to anyone diligently working away at a high interest car loan. Refinancing allows you to secure a lower interest rate on your loan, reduce your monthly payments, and even free up some much needed ready cash. However, refinancing a car loan does have a downside, and it is important to understand both the advantages and disadvantages before you put pen to paper.

woman in car

Car Loan Refinancing in a Nutshell

Refinancing an existing car loan is a relatively simple process. Essentially, you are using a new, and more favorable, loan to pay off the loan you have now. Of course, nothing is ever that simple. You first have to find a lender who is willing to underwrite a new car loan that gives you a lower interest rate, as well as offering more manageable repayment terms. Still, if you can secure a new loan that is even a single percentage point cheaper than your current loan you can save a significant amount of money, especially if the remaining balance on your existing loan is fairly substantial.

The Pros and Cons of Refinancing Your Auto Loan

There are some definite advantages to refinancing your current car loan, and they all have to do with managing your money more effectively. Some people refinance their auto loans to save on the total cost of their purchase, while others choose to refinance as a way of lessening their monthly financial burdens. In some cases, when there is sufficient equity in the vehicle itself, people choose to refinance in order to free up some ready cash. Let's take a closer look at some of the benefits of refinancing your existing auto loan.

  • Lower Interest Rates – This is the most common reason people choose to refinance their car loans. If your credit was less than stellar when you applied for your original loan, or if you opted for dealer financing on your purchase, you may have been forced to accept a higher interest rate than you would have liked. More to the point, interest rates are always in flux and what was a good deal two years ago may not be so attractive now. Refinancing your existing auto loan at a lower interest rate can save you a considerable amount of money over the life of your loan. Even shaving a point or two off of your current interest rate can save you hundreds, if not thousands, of dollars on the total cost of your loan.
  • Smaller Monthly Payments – The second most popular reason for refinancing an existing auto loan is to lower your monthly payments in order to make the repayment plan a little more manageable. This can be a definite advantage if your financial status has changed since you took out the original loan, and you are finding that the size of your monthly payments is becoming something of a burden. Again, this ties in directly to securing a lower interest rate on your new loan.
  • Reduce the Term of Your Loan – If you refinance your car loan at a significantly lower interest rate, it is possible to shorten the term of the loan with little or no impact on your monthly payments. This makes it possible to pay off the debt quicker, ultimately saving you money on the total cost of the loan.
  • Cash Out for Emergencies – If you've built up some equity while paying on your current loan, you may be able to take advantage of a cash-out option when you refinance your vehicle. The new lender will base your new loan on your vehicle's current value, using guidelines set down by the National Automobile Dealers Association. If your vehicle is judged to be worth more than you owe, a lender may agree to pay off your current loan and pay you the difference in cash. It's worth noting, however, that while a cash-out option can be beneficial in an emergency, it typically results in the extension of the life of your loan and an increase in its total cost.
  • Changing Lenders – This is more of a personal consideration, but it does come into play when deciding to refinance an auto loan. If you are unhappy with your current lender, and you find their services lacking in any area, you may choose to refinance your vehicle simply as a way to partner with a lender that is more supportive or responsive to your needs as a borrower.

While there are some distinct advantages to refinancing an existing car loan, there are also some disadvantages that you need to be aware of, and they can negate any possible savings that you may have anticipated.

  • Longer Repayment Periods – It's important to understand that refinancing isn't always a guarantee of savings. Sometimes, even though you've refinanced at a lower interest rate, you can still end up increasing the total cost of your loan. If your new lender offers you a better rate, but extends the life of your loan at the same time, you may not see any real savings. In fact, you may actually end up paying more in the long run. If you are trying to lower your monthly payments, or you need to take advantage of a cash-out option, refinancing may still be the smart move. But you should consider it carefully before entering into an agreement that may end up costing you more than you may have anticipated.
  • Negative Equity – Negative equity means that you owe more on your vehicle than it is actually worth, and this can happen all too easily if you refinance a car loan on extended terms. If you are already upside down on your existing loan, you may find it extremely difficult to find a lender willing to refinance your vehicle, and if you do you are likely to be faced with much higher interest rates to offset the reduced collateral value of your automobile.

hands with keys

When to Consider Refinancing

Refinancing a vehicle is not for everybody, and there are times when it can work against you. That being said, if one or more of the following conditions apply, you may find that refinancing makes good financial sense.

  • Interest Rates Have Dropped – If interest rates have dropped significantly since you first purchased the vehicle, refinancing may be a good option. It's worth pointing out, however, that when you refinance a vehicle it will be treated as a used car loan, and as such will be subject to a higher interest rate than if you were borrowing towards the purchase of a new automobile. This is because the collateral value of the vehicle will have depreciated since the original purchase. Still, if you can shave even a couple of points off of your current loan you can save a fair amount of money.
  • You Failed to Get the best Rates on Your Original Loan – This happens all too often when dealer financing is involved, or when buyers fail to fully research their loan options before finalizing a purchase. If your current loan is saddled with unusually high interest rates, refinancing is a wise decision.
  • Your Credit Score Has Improved – If your credit score was compromised in any way when you applied for your original loan, you may have been forced to accept a relatively high interest rate. A credit history that is even slightly marred can easily result in interest rates of 18% or more. After a period of making regular on-time payments on your original loan, you may find that your credit score has improved, in which case you might be eligible to refinance at a lower interest rate.
  • Your Financial Situation Has Changed – It doesn't take much of a financial setback to turn a simple car loan into a monthly burden. If your financial circumstances have take a turn for the worse, it may be wise to refinance your vehicle, if only to make your monthly payments more manageable.

Where to Apply for Refinancing

Banks and credit unions are usually the best options when it comes to refinancing your vehicle. Online lending companies are also a viable alternative, and some even specialize in auto refinancing. However, online lenders rarely offer the competitive interest rates that are available from traditional banking institutions. Moreover, dealing one on one with a bank or credit union in your community typically makes the entire loan process easier. You can speak with a loan officer directly, and go over all aspects of your refi agreement before you sign the contract. You will also have direct access to customer support throughout the life of your loan.

As with any car loan, you will want to investigate a few different lenders in order to find the best deal that is available. Compare and contrast three to four different refinancing offers, and pick the one the best suits your financial needs at the time. Remember, refinancing a vehicle is simply paying off one loan with another, and you do not want to rush into any agreement that you don't fully understand, or that you are not completely comfortable signing.

happy driver

Applying to Refinance Your Vehicle Loan

When it comes to refinancing an auto loan, the application process is relatively quick and painless. In fact, you'll likely find it much easier than when you applied for your original loan. Many lenders, banks and credit unions among them, allow customers to apply for refinancing online, often with same day approval. You may even be able to finalize the loan online with an e-signature, or by printing out the loan documents and returning them by mail. Having said all that, it is always helpful to speak with a loan officer in person to ensure that you fully understand the terms of the agreement, and in order to negotiate the best deal possible.

Whether you decide to apply online or in person, you will need to have some specific information at your fingertips in order to complete your application. The following checklist should help ensure that you have all of the necessary documents at hand when it comes time to contact a lender.

  • Valid Drivers License – Standard when applying for any auto loan.
  • Social Security Card – Again, standard when applying for any loan. Your lender will use your social security number to verify your identity.
  • Title and Registration – Your lender will need to see the title to the vehicle to confirm that it is registered in your name. You will also be expected to provide proof of insurance.
  • Pay Stubs – Your new lender will want to verify your income to ensure that you have the financial means to pay off your new loan. Most creditors require 2 to 3 months worth of valid pay stubs as proof of employment and income.
  • Tax Forms – If you are self employed, some lenders may require you to submit copies of your 1040 SE forms as further proof of income. You may also be asked to provide copies of your most recent tax returns (typically going back 2 to 3 years). Lenders use this information not only to verify employment and income, but also to track trends in your earnings.
  • Credit Report – As with any loan application, your new lender will run a credit check to determine if you are eligible for refinancing. Your credit report will also have a significant impact on the terms and conditions of your refi loan. It is always advisable to check your credit report before you apply for refinancing, as this will give you a better idea of your eligibility, and will put you in a better position to negotiate more favorable interest rates.

Keep in mind that while you are researching lenders, and applying for a refinance loan, you must maintain your current repayment schedule. Should you miss any payments, you will not qualify for refinancing. Your responsibilities to your original lender will remain in force until the refinance agreement is finalized and your new lender has resolved the original debt.

Under the right circumstances, refinancing an auto loan can be a smart financial decision. It can help you reduce the total cost of your loan, or can provide some much needed financial relief if you are finding it increasingly difficult to keep up with the payments on your existing loan. Still, as advantageous as refinancing may be it is still a debt, and as such should be approached with all of the care and attention to detail that you would bring to any other loan important financial decision. Take your time, research a variety of different lenders, and only sign a contract when you have a refinancing agreement that you are comfortable with, and that you are sure will serve your current financial needs.

Homeowners May Want to Refinance While Rates Are Low

The Federal Reserve has hinted they are likely to taper their bond buying program later this year. Lock in today's low rates and save on your loan.

Are you paying too much for your mortgage?

Find Out What You Qualify For

Check your refinance options with a trusted local lender.

Answer a few questions below and connect with a lender who can help you refinance and save today!

Источник: https://www.mortgagecalculator.org/calcs/auto-refinance.php

Car Payment Calculator

 

Use this calculator to quickly estimate the monthly payments on a loan. Enter the amount borrowed, any application fees, the loan term & interest rate charged on the loan. This calculator defaults to monthly payments though you can change to using an alternate payment frequency. There are also options to add sales tax, trad ins and rebates to your calculation. The affordability calculator in the second tab allows you to estimate an affordable vehicle price based on your current savings and monthly budget.


The Complete Guide to Buying a Car

Authored by Jose Abuyuan on January 10, 2020

Purchasing a car is an overwhelming experience, especially for first-time buyers. With so many options and financial decisions to consider, the entire process can be taxing.

Before spending hard-earned cash, many buyers check if a new or used car is better. They negotiate different loan rates, terms and how much down payment to spend. Reviewing your auto deal is crucial to avoid long-term debt.  

Did You Know?

In 2019, the New York Federal Reserve reported that 42 percent of U.S. car owners said auto loans have caused them stress. About 36 percent of the respondents said they believe auto debt is more stressful than looking for a new job.

To help you out, our guide will walk you through the fundamentals of purchasing a car. We’ll also discuss vehicle depreciation and negative equity trade-ins.

Know the Right Car to Buy

Woman choosing cars

Ask yourself what kind of vehicle you need. Your priorities must go beyond different models, features and fancy designs.

Assessing your lifestyle tells you what car and features to consider. Are you looking for a spacious family vehicle good for long driving? Do you need a compact sedan to drive around the city? Moreover, think about how often you’ll be driving and how far.  

Do your research. Make sure to compare prices and rates. Uninformed consumers make the mistake of choosing the first option when there are better offers.

Pigly's Tip!

Going to a dealership with a clear idea of what you want will make the process a bit faster. Be specific about what you want. It makes you less susceptible to upselling schemes. This way, you can avoid unnecessary features and costly extended warranties.

How Much Should You Spend?

Financial experts suggest limiting monthly car payments between 10 to 15 percent of your take-home pay. It’s a good rule that will help you avoid overspending. To get a better estimate, include this percentage into your monthly budget. It will give you a good idea of how much you can reasonably spend.

Pigly's Reminder!

To keep your overall interest payment low, aim for a loan term no longer than 6 years (72 months). Beware of 7-year auto loans that force you to pay more interest than the car is worth.

How Much Down Payment Should You Make?

Car website Edmunds.com recommends spending a down payment of at least 10 percent. Other finance experts suggest aiming for no less than 20 percent for new models, and no less than 10 percent for used units.

Credit Score Impact on Auto Loan Rates

Good credit score ratings

Higher credit standing affords you lower interest rates and much more favorable terms. It’s beneficial in the long run to save extra income.

Be sure to check your credit score before applying for a car loan. To get a free credit report, go here.

Credit bureau Experian published data on the average loan rates of buyers with different credit scores. The table below indicates that the average consumer spends more in interest if they have a low credit score.

Score Range Average Loan RangeAverage Term Length in MonthsAverage Loan AmountTotal Interest Paid
781-850 4.2% 63 $31,700 $3,700
661-780 5.0% 70 $33,500 $5,200
601-660 7.9% 73 $33,100 $8,700
501-600 12.2% 73 $29,400 $12,400
300-500 14.9% 72 $26,400 $13,700

*Experian data based on Q4 of 2018

High credit score buyers pay a total interest of $3,700, while buyers with the lowest credit score pay $13,700. That’s a difference of $10,000 in savings. Low credit score buyers are also assigned longer loan terms.

As of Q3 in 2018, Experian reports that the average credit score of borrowers who applied for a new auto loan was 717.

Lenders use different scoring systems to evaluate your credit score. These include FICO and VantageScore, which use the same credit report to evaluate your creditworthiness.

The most common credit scoring system is FICO, with scores that range from 300 to 850. It classifies credit standing into the following 5 bands:

FICO Classification Range
Exceptional 800-850
Very good 740-799
Good 670-739
Fair 580-669
Poor 300-579

If you have Good to Exceptional credit, you have a greater chance of being approved by lenders. However, a lower credit score does not mean you won’t get approved. You will find fewer lenders willing to approve your loan.

On the other hand, the following scale shows the VantageScore rating system:

VantageScore Classification Range
Excellent 750-850
Good 700-749
Fair 650-699
Poor 550-649
Very Poor 300-549

Likewise, under VantageScore, you must aim for Good to Excellent credit to obtain favorable rates. 

If you can wait to buy a car, take time to improve your credit score. You can do this by paying your bills on time, paying out existing credit card debt, and keeping your balances low.   

Pigly's Tip!

Before applying for a loan, review your credit report to dispute errors. This helps increase your credit standing so you can obtain better rates.

Get Pre-approved for an Auto Loan

Happy woman approved for loan

Many car experts recommend getting pre-approved for a loan before visiting a dealership. Based on Experian data from the first quarter of 2019, around 85.4 percent of new cars are financed with a loan or a lease.

Ronald Montoya of Edmonds.com says pre-approved financing is a practical way to afford a car. However, pre-approval does not always guarantee the lowest rate. Despite this reality, Montoya says it gives you a definitive baseline to compare rates to know which deal works in your favor.

In an NPR interview, personal finance auto editor Philip Reed also says the best advice is to get pre-approved. Knowing your budget limitations urges you to be more discerning about closing a deal.

Public Interest Research Group (PIRG) senior director Ed Mierzwinski gives the same advice in a CNBC, warning consumers about the rising auto debt rates. Pre-approval keeps the overall cost of your vehicle low. It ensures you can afford monthly payments to avoid defaulting on your loan.

Here are other benefits of getting pre-approved for a car loan:

  • Helps you stick to your budget – For instance, if you’re approved for a $35,000 loan, find a car that costs a few hundred dollars lower. Don’t forget to factor in taxes and other fees in your budget.
  • Helps simplify negotiations – Knowing how much you can afford keeps you concentrated on the actual selling price. It can help you avoid lower monthly payments and longer terms, which is more expensive.
  • Saves time from more finance and insurance paperwork – Expect finance and insurance managers to pitch additional warranties. If you’re pre-approved for a loan, you can decline by saying your loan limit doesn’t allow extra costs.
  • Eliminates the risk of ‘spot delivery’ issues – Spot delivery occurs when dealerships deliver your car prior to bank financing approval. It also happens when they let buyers with unstable credit take a car. This scam misleads consumers into thinking the deal is final. If you sign papers without bank approval, the dealership can renegotiate the agreement. They can even take back the vehicle if you cannot secure financing within a period of time.

New Cars vs. Used Cars

Old vs new car model

The decision to purchase a new or used unit usually comes down to two factors:

1. How much money you can spend.

2. How long you want to keep the car.

Whether you choose a new or used car, know the pros and cons below.

New CarUsed Car
PROSCovered by warranty   Used cars from pre-certified dealer programs are less than half the cost of a new unit  
Has higher fuel efficiency   You can find late-model units with low mileage in really good condition  
Comes with the latest safety features  
Most new cars come with emergency roadside assistance service  
Pre-certified used cars often have strong warranties, including factory warranty and a chance to buy extended warranty  
No need to worry if the car had previous maintenance issues   If you are skilled in car repair, it can reduce your acquisition cost

If you have a good credit score, many lenders provide financing with low or zero interest rates for new cars  
Depreciates slower
Lower maintenance cost for 2 to 3 years  
CONSMore expensive than used carsCan be harder to find the exact car and features you want  
Comes with higher insurance cost than used units Can have reliability and undisclosed maintenance issues
Value declines more quickly, with new cars depreciating by thousands of dollarsBuyers need to perform routine maintenance sooner compared to new cars
You shoulder higher debt – new cars depreciate faster compared to used models You are not protected if you end up buying a lemon. Lemon laws vary per state and only apply to cars of a certain age with specified mileage.

Choosing New Models

There are owners who prefer to use their car for a long time (6 years or more) before buying a brand-new unit. Other drivers purchase rare luxury models which they intend to keep.

Buyers who choose new models believe it’s a worthwhile purchase. First, they do not worry about previous damages and costly routine repairs. It’s certainly the preferred option for consumers who prioritize dependability and safety.

New cars also perform better than used units in the first 2 to 3 years. As the first owner, you can keep track of your vehicle’s condition and make sure it is well-maintained.

Some rare cars may also increase their value over time. Think of expensive vintage cars which are now prized collector’s items.

Consumers Who Prefer Used Cars

These days, many car owners trade their unit after 3 to 5 years. They are happy to get a used model with relatively lower mileage. While it may be challenging to source a specific car, you can still find low-mileage vehicles that look and work almost like new.

Used cars are much more cost-effective because they depreciate slower. If you are on a tight budget with limited financing, this is a practical option for you.

People buy quality used cars with a hundred-thousand miles. They drive them for a hundred-thousand miles more. In terms of reliability, many used cars in the market still perform quite well.

Ultimately, the choice to purchase a used or new unit will boil down to your needs. At the end of the day, make sure to get the most out of your purchase.

The Dangers of Negative Equity

Car sinking underwater

In the auto industry, ‘negative equity’ occurs when a consumer’s compounding debt surpasses the car’s actual value. When a car owner trades in a unit that is not fully paid, they roll over their existing debt to the new loan. This financial practice is risky, leaving car owners prone to neverending debt.

In November 2019, the Wall Street Journal reported that there is a growing number of buyers with negative equity. According to the report, in 2009, an estimated 19 percent of consumers traded in cars with negative debt. By 2019, the rate has increased to around 33 percent. Today, many of these consumers are at least $5,000 in debt.

To avoid this debt trap, do not buy a new car when your previous debt is unpaid. Do not go to Buy Here Pay Here dealerships that impose high rates and long payment terms. It’s better to save up and improve your credit score before buying a car.

When is it Beneficial to Lease a Vehicle?

Car rental options

Car leasing allows you to drive a new car without making large monthly payments. This option is ideal if you are building your income or not ready to take a loan.

It’s an affordable way to ‘rent’ a vehicle if you cannot commit to buying a new or used unit. Generally, leasing allows you to drive a car (usually for 2 or 3 years), not own it. You can choose this option if you are not yet sure about owning a vehicle.

Similar to a loan, you give monthly payments according to agreed terms. It also requires you to pay a down payment.

By the end of the lease, you typically return the unit to the dealership. Take note: a lease contract must specify the option to buy the unit in case you want to keep it. Otherwise, you cannot purchase the vehicle from the dealer.

The table below runs down the pros and cons of leasing a car.

Pros Cons
Lower monthly payments   Monthly payments don’t go towards equity / car ownership  
Smaller down payment Not all lease contracts allow you to buyout your lease at the end
Get warranty coverage and maintenance  Costs more in the long run for a car you do not own
Allows you to drive the latest modelsThere may be many penalties and fees by the end of the lease
No need to worry about selling or trading the car when the lease is doneYou cannot customize the car’s features
 If you need to move, getting out of a lease is expensive. The dealer might not allow you to take the car.

Leasing to Average Consumers

In the past, people generally leased luxury models. But according to Consumer Reports, the leasing market has changed for the auto industry. More sedans, compact vehicles and small SUVs are now leased to average consumers.

A growing number of dealers now offer lease terms below 36 months. A short contract might be attractive, but cars depreciate fast during the first 2 years. This means you will likely pay expensive penalty fees for exceeding normal wear and tear. When this happens, some drivers opt to buy out their lease.

How is an auto lease payment calculated? Monthly payments are calculated according to the vehicle’s depreciation rate.Car depreciation refers to the change in the unit’s present value and its value by the end of the lease, which also includes interest and fees.

Types of Auto Lease

  • Closed-end Lease – You do not pay more when you return the unit. But you need to pay penalty fees if the car needs plenty of repairs. You also pay extra if you exceed the agreed miles. If the vehicle’s worth becomes less than the agreed amount, you will no longer have financial obligations.
  • Open-end Lease – This lease does not specify the value of the car in the contract. By the end of the lease, you may get a refund if the unit’s value turns out more than expected. If it’s worth less, you will likely have to pay more.

Does Credit Score Affect Leasing Eligibility?

Yes, you need good credit standing to qualify. Credit bureau Experian states the average FICO credit score to get approved is 725. But generally, if your credit score is 680 and up, it is easier to get a lease.

When is it Worth Buying a Leased Car?

According to Edmunds.com, you should ask the following questions before buying a leased unit:

  • Is the car in good mechanical condition? – Vehicles in good condition do not entail costly maintenance fees.
  • Have you gone beyond the lease’s mileage limits? Did the car incur damages? – Once you complete a lease buyout, you will not be fined for exceeding the mileage or for any damages. Consider your penalty costs. Buying might be more practical than paying expensive fines.
  • Do you have enough funds for the buyout? – Buying out a lease by making a new down payment will make your monthly payments manageable. Otherwise, your monthly payments will increase, making it more costly than your actual lease payment.

The Best Time to Buy a Car

Woman happy over Christmas car sale

Car prices change depending on the month, time of the week, and even the time of the day.

The best time to shop for a car is influenced by customer traffic and monthly sales deadlines. Going when there are fewer buyers increases your chances of getting a good deal. It’s also beneficial to take note of end of the model year sales to secure good terms.

Here are the best times to visit a dealership:

Shop at the Beginning of the Week

Ideally, you should shop early in the week, between Monday to Wednesday. Dealerships are crowded during weekends, which means you get less personal attention. It’s easier to negotiate more favorable terms when a salesperson is focused on your needs.

The Latter Part of the Month and Towards the End of the Year

Sales agents have monthly, quarterly, and annual sales targets. They are extra accommodating if closing your deal will help them reach their quota.

Going to a dealership by the end of the month can help you negotiate better terms. However, take note that sales deadlines do not necessarily fall on the 30th of the month. You should shop around the 26th to 28th to secure more promising offers.

Pigly's Tip!

The best time of the year to buy a car is during the months of October, November, and December. Buyers get the most discounts during these months. Holiday sales like Black Friday and New Year’s Eve will also help you secure a good deal.

According to Edmunds.com, the least discounted months fall on January to April. You also get better discounts between May to September. But it’s wiser to buy your unit later in the year.

Buy the Current Year’s Model Once Next Year’s Model is Out

Dealerships need to sell old units to make room for the new ones. If you buy this year’s model when the new one arrives, you can get a good discount.

Car makers usually release new models in the summer. Keep track of this schedule and you might lock in a better deal.

Understanding How Cars Depreciate

Man pushing old car

Cars depreciate in value the moment you drive it out the lot. It can lose 20 percent or more of its initial value in the first year. By 5 years, it loses around 60 percent of its original price.

After one year, however, depreciation rate normally evens out. This is why used cars typically do not depreciate as fast compared to new models.

Managing Vehicle Depreciation

The best way to manage depreciation is through regular car maintenance. While you’re at it, keep all your service records. Units that do not get routine checks and repairs usually depreciate faster. In the long run, they are harder to sell.

Eric Ibara, director of residual value consulting for Kelley Blue Book, states that one of the best ways to manage depreciation is to limit car mileage. This is not the most realistic recourse, however, since many people rely on cars for daily use.

Moreover, Ibara says that what passes as high mileage depends on the vehicle. When certain models incur more miles than usual, risk of faster depreciation rises. For instance, if you have a Ferrari 488 GTB with 16,000 miles, that has high mileage. This is because luxury cars are not driven frequently by the average consumer.

Pigly's Tip!

Another way to avoid high depreciation is to stay away from creative add-ons. Features like aftermarket bumpers and loud mufflers will decrease your unit’s value. Your vehicle’s color can also affect its resale price. Personalized colors like bright green, yellow and violet make cars difficult to sell.

The Bottom Line

Buying cars come with many challenges. But if you are a well-informed consumer, you can avoid unfavorable deals. Whether you choose to buy a new or used unit, or lease a car, will depend entirely on your needs. Finally, be sure to check your credit score and secure financing before going to a dealer.

For more information on how to save for major purchases, visit this page.

About The Author

Jose Abuyuan is a web content writer, fictionist, and digital artist hailing from Las Piñas City. He is a graduate of Communication and Media Studies at San Beda College Alabang, who took his internship in the weekly news magazine the Philippines Graphic. He has authored works professionally for over a decade.

Источник: https://pigly.com/auto/

Buying a car is a major financial decision. In fact, outside of your home, your car may be your most valuable possession. As you head into the dealership to start shopping for a car, make sure you do your homework. With a little bit of guidance you can find a great car at a great price, and get a loan that fits your needs. Before you shop for a car, take some time to read this guide to learn what you need to know about cars and car loans.


Here are the list of topics this e-book contains:

 

Best Time to Buy a Car and Get a Car Loan

When you need a car, you may not have the luxury of waiting until the "best time" to start your purchase, but if you have some flexibility, you can try to time the purchase around the calendar. Dealer incentives and the motivation of your salesperson can help you get a great deal on a car purchase, if you shop at the right time.

Choose the Right Month

First, consider the month you shop. Typically, October, November, and December are the best time to buy a car. There are two reasons for this. First, dealerships are nearing the end of their quota calendars at this time, and they are motivated to reach their annual sales goals. Second, dealerships are anticipating a flood of new vehicles for the coming calendar year. The current year's model will be discounted to account for this, because they need to move them out the door.

Choose the Right Time of the Month

Dealerships have quotas not only for the year, but also for the month. If they are not close to meeting their goals, they may offer better pricing or incentives if you shop towards the end of the month.

That said, the very last day of the month may not be the best time, but rather a few days before the month's end. Each dealership has its own time frame for quotas, and they may not sync perfectly with the calendar month.

Choose the Right Day of the Week

Finally, the day of the week you shop has an impact on the price of your vehicle. Weekends are prime shopping time for car dealers, so you can't expect a good price on a vehicle if you shop on the weekend. Instead, consider shopping early in the week, when the sales people are starting to look for new sales to increase their income for the coming week.

Holidays can also bring discounts on new vehicle purchases. Three specific holidays tend to bring big discounts on vehicles, including:

  • Memorial Day – If you're going to need a car in the summer, shop during Memorial Day sales for the best price.
  • Black Friday – Skip the lines at the retail stores and shop for a car instead on the busiest shopping day of the year.
  • New Year's Eve – New Year's Eve brings many dealerships to the end of their calendar years, so you have a holiday sale working with quotas to help you get a good price.

Timing Your Car Loan

Timing has less of an impact on your car loan than it does on your vehicle purchase. However, if a lender that receives commissions on car loans, shopping toward the end of the month can help you get a slightly better rate or faster approval.

For more tips and other factors to consider while searching for your new vehicle, review our blog on the best time to buy a car and get a car loan.

 

What Is MSRP and How It Impacts the Sales Price

Once you've chosen the right time to buy your car, the next step is to learn about the prices you will see when you walk into the dealerships. If you understand the pricing on the sticker of the cars you're looking at, your negotiation skills will increase.

What Is the MSRP?

The MSRP is the "sticker price" on the vehicle because it's the price listed on the window sticker on the vehicle as it sits in the dealership. MSRP stands for "manufacturer's suggested retail price," and that's exactly what it is. This price is what the manufacturer suggests the dealership sells the vehicle for. This does not mean it is the selling price. It also does not mean it's the price the dealership paid for the vehicle.

What's Not Included in the MSRP?

The MSRP is simply a suggestion. It gives the dealership and buyer a starting point for negotiations. It does not include several things that impact the total cost of purchasing the vehicle, including:
· Destination charge – If the dealership had the vehicle shipped to the lot, it must pay the cost of that shipment.
· Dealer-installed options – If the dealership adds an anti-theft device or other option to the vehicle after arrival, that increases the price.
· Taxes, fees, and registration – These fees, mandated by the state, are non-negotiable, but will add to the cost of your vehicle.
· Dealership fees – Some dealerships charge additional fees, such as document prep fees, dealer prep fees, and advertising fees, which may be negotiable.

How MSRP Helps Buyers

The MSRP is a good tool to use to compare vehicles and to apply for your loan. It gives you a ballpark for what the vehicle will cost, and allows you to compare the cost of similar vehicles to each other. While it may not be your out-the-door price, it is a good benchmark to use as you shop.
The MSRP also gives you a starting point as you negotiate. If the dealer is highly motivated to sell, they will negotiate below this benchmark. However, you may actually pay more than this price. If you're shopping for a vehicle that's in high demand, the dealership can put an asking price on it that's higher than the MSRP. Remember, MSRP is nothing more than a suggestion.

For more information on how the recommended selling price impacts your car loan application, review our blog on the MSRP meaning and how you can prepare for negotiations at the dealership.

 

Finding the Best Car and Car Loan for You

Now that you understand pricing and timing for your vehicle, it's time to start shopping. How can you find the best vehicle and the best car loan rates to make that vehicle affordable? By carefully considering your needs and then shopping based on those needs, you will quickly find the best loan and vehicle for your situation. Here is a step-by-step guide to finding the right car.

Step 1 – Consider Your Needs

The first step is writing out your needs. What, exactly, do you need in your new vehicle? Does it need to carry a certain number of passengers? Do you need to be able to haul a trailer? Is technology, like a backup camera or in-vehicle movie players, important to you? Make a list of the things you know you need in your vehicle, then make a list of the things you might want.

Step 2 – Set a Budget

A budget is helpful before you begin shopping. Typically speaking, your car payment should not be more than 15% of the money you bring home every month. You can find cars that are more or less than this amount, but keeping your budget in mind will help you shop smart. If you're not sure what the monthly payment would be for a specific price range, use an auto loan calculator to help.

Step 3 – Research Costs of Ownership

As you consider the vehicle that's right for your needs, you must consider all of the costs of ownership. Some things that can vary from one vehicle to the next include:
· Gas mileage
· Cost of insurance
· Cost for major repairs
· Vehicle depreciation
If you're trying to decide between a few similar vehicles, weighing these costs of ownership can help make your final decision.

Step 4 – Take Some Test Drives

Before deciding on the right vehicle for your needs, take some test drives. Sitting behind the driver's seat of a vehicle and feeling the vehicle's responses to your driving habits will help you find one that not only fits your checklist, but also feels great to drive.
Schedule some test drives before you start shopping in earnest. If you can, take the vehicle through some of your typical driving experiences, such as freeway driving or rural driving, depending on your commute. Look over the location of the various controls, listen to the sound of the engine, and even take time to listen to the stereo and sound system. Sometimes a test drive will help you rule out a vehicle you thought you'd love, and this will make your search for a new car easier.

Step 5 – Find a Loan

A car loan is an important part of the shopping process. You have three basic choices for your car loan. These are:
· Get a loan through the dealership
· Get a loan through a bank or credit union
· Get a loan through another lender, such as an online car loan company

If you choose to get a loan through the dealership, you will want to remember that car loans are a major part of their income. They are going to try to fit you into a monthly payment, and will work to negotiate the payment amount.

Instead, consider working with a bank or credit union. Get pre-approved for a loan early in the process, then shop knowing what you can afford to spend.

The one exception may be when shopping for a new car. New car incentives often include the car loan in the overall incentive package. Zero-percent financing or large cash rebates can make your new car purchase more affordable. Keep in mind that these types of incentives often come at a cost somewhere else in the process, such as a higher sales price or less value for your trade-in, so do your research before signing the loan documents. A search for the best cars available and conducting due diligence does not have to be a stressful or uncertain process.

Considering financing your car loan at a dealership? Before you head to the dealership, review our blog on the truth about 0% apr car deals and dealer rebates.

For more tips on how to save time and money, review our blog on finding the best cars and car loans for you.

 

Selecting the Best Used Car and Car Loan for You

If you're shopping for a used vehicle instead of a new one, you may have additional considerations. While you will still want to follow the previously mentioned steps, including the test drives, vehicle research, and needs estimations, you will need to dig a little more deeply to avoid buying a lemon.

Here's how you can protect yourself.

Know Where to Look

If you're shopping for a used vehicle, you don't have to shop only with the dealership. You can also look in classified ads or shop online to find private sellers. If you buy from a private seller, make sure you carefully research your options and the seller to avoid scams. There are several steps you can take to ensure that the vehicle itself is worthwhile as well.

If you are considering buying from a dealership, review our Car Dealerships Secrets Revealed Guide. 

Check the Vehicle History Report

A Vehicle History Report is invaluable in your search for a used car. The best used cars will have few owners and no accidents on their history. If you notice serious flaws on the Vehicle History Report, the price should reflect that. CarFax and AutoCheck are both popular websites that let you see the car's full history based on its VIN.

Have Your Mechanic Check it Out

If you get serious about a used car from a private seller, ask if you can have your mechanic check it over before you purchase. A reputable seller will be willing to let you do this, provided they can come with you to the appointment. If the seller isn't willing to let you have your mechanic check the vehicle, chances are they are hiding something.

If you are considering purchasing from a private seller, review our blog on reasons why an extended car warranty is worth it.

Get a Used Vehicle Car Loan

Like new vehicles, used vehicles have three basic choices for car loans. However, you have fewer incentives to shop for a loan at the dealership, because the special financing offers are rarely available with used vehicle purchases. Instead, the best used car loans are typically through a bank or credit union, rather than at the dealership.

Still uncertain how to select the right car and loan for you? Be sure to review our blog on selecting the best used cars and car loan for you.

Be sure when you are performing your car loan search that you consider payment protection. Payment Protection allows you to rest easy knowing you're covered in life's most unpredictable events. It can include coverage options for life, unemployment, and disability payment coverage.

To learn more about Payment Protection, review our blog, "7 Questions To Ask Before Signing Up For Payment Protection."

 

 

What You're Missing in Your Search for the Best Car Loan Rates

Now that you know what to do to find the best used cars and new cars, the next step is to figure out the right car loan. The most important factor to consider in your car loan is the rate. Car loan rates are the interest rates charged for borrowing money to buy a car. Understanding how they are figured and where you will get the best rates is critical when shopping for a car. Car loan rates are based on the vehicle, your credit score, current interest rates, and the lender's requirements.

Credit Score and Your Car Loan

Your credit score directly impacts the rate. The better your credit, the better your rate. Checking your credit rating, and taking steps to improve it before applying for your loan, can help you get a better rate.

Choose the Right Vehicle

The vehicle you choose also impacts the loan rate. Typically, car loans for new vehicles tend to be lower than car loans for used vehicles. This may not make sense to you, since new vehicles cost more. However, lenders look at the vehicle's value, and used vehicles tend to be worth less than new vehicles, so they have slightly higher interest rates. This protects the lender if you fail to make your monthly payments on time.

Watch Interest Rates

Car loan rates are based on federal interest rates. When those increase, so do the rates for car loans. When those drop, so do the rates for car loans. Consider applying for pre-approval from your bank or credit union when you see rates steadily decreasing, because chances are they will increase again in the future.

Shop Around

Finally, shop around carefully for your loan. Don't assume that your only or best option is at the dealership. While some buyers will find the dealership offers a good choice, they are not the only choice. You can, and should, approach multiple lenders if you're looking for the best rate on your car loan.

A car loan is a long-term financial commitment. Before you sign on the dotted line, be sure you are getting the best deal by reviewing our blog on getting the best car loan rates available.

Once you decide on the best car loan for your needs, be sure to consider Guaranteed Asset Protection if you are purchasing a new car. Guaranteed Asset Protection (GAP) covers the financial gap between what your car insurance covers and the outstanding amount of your vehicle or car loan.

For help deciding if GAP is right for you, review our blog, "5 Reasons Why You May Need Guaranteed Asset Protection (GAP)."

 

What You Should Know When Using an Auto Loan Calculator

An auto loan calculator is a great tool to use when shopping for a new or used car loan. It will help you understand not only the amount of your monthly payment, but also what different changes to your loan terms will do to that monthly payment. Here's how you can use one as you make your vehicle purchase.

What It Includes

An auto loan calculator allows you to input various aspects of your loan. These include:
· Term in months
· Interest rate
· Vehicle price
· Sales tax
· Down payment
· Trade-in

Once you input these values, you will see how much each month's payment is. You may also be shown how much in interest you'll pay over the life of the loan.

Calculate Your Monthly Payment

The best thing to do with a car loan calculator is to calculate your monthly payment. If you know the interest rate on your loan and your estimated car purchase price, you can plug that information in to the calculator to see the amount of your monthly payment. Change the loan's term to see how that changes your monthly payment amount.

Determine the Change Different Interest Rates Make

If you are shopping for different loans, a car loan calculator lets you see the difference they will make on your monthly payment and the overall cost of the loan. Even a change of just one percent can add up to big changes. Using a car loan calculator will show you those changes quickly, and this may motivate you to shop harder for a different loan.

Calculate the Difference a Trade-in or Down Payment Makes

Maybe you're considering selling your existing car first, or using it as a trade-in. Perhaps you're considering how much money to put down on the car you purchase. Again, a car loan calculator will help you decide how to handle these questions. By plugging in the values, you can see which choice makes the most financial sense.

For more information on how calculating your payment ahead of time can save you money in the long run, review our blog on auto loan calculator tips.

 

Looking to Refinance Your Car Loan? Here's What You Need to Know

Many car owners don't know that they can refinance their car loans. Doing so may let you get a better interest rate, shorter term, or lower monthly payment. If your current car loan is too expensive for your needs, or you want to pay it off more quickly, refinancing may be the option. Before you refinance, make sure you do your homework.

Research Pre-Payment Penalties

Before you refinance, check the terms on your existing loan. Many lenders charge a fee if you pay the loan off early. If you have a pre-payment penalty, understand how this affects your refinance.

Does Refinancing Make Sense?

Before you refinance your car loan, make sure it makes sense financially. Some reasons that it makes sense to refinance includes:
· Interest rates have lowered since the original loan. If the interest rate on a $25,000 loan drops from 7 to 5 percent, you can save about $10 a month and over $2,000 over the life of the loan.
· Your credit rating has increased since the original loan. This can earn you a lower interest rate.
· Your financial situation has improved. This may allow you to refinance for a shorter term, which, then, helps you pay off the car more quickly.
· You didn't research your options the first time. There may be a better loan out there if you take the time to research.
· Your loan is too expensive. Sometimes it makes sense to refinance if your current loan doesn't fit your monthly budget. A longer term can lessen the monthly payment amount.

When Does Refinancing Not Make Sense?

There are times when refinancing does not make financial sense. Here are some circumstances when you should just stick with your current loan:

· You're hoping to apply for a loan soon. If you know you're going to be looking for a mortgage or large personal loan in the near future, don't refinance your car loan. It will impact your credit rating, and could hurt your ability to seek your loan.
· The fees outweigh the benefits. You will pay fees to refinance your loan. Make sure you stand to gain more than you'll be paying to refinance.
· Your car isn't in good condition. A lender will only lend for a car that has value. If you're upside down, the car has significant damage or mileage on it, or it has little value for some other reason, your lender may not be willing to loan you the money you need.
· You're almost done repaying your loan. If you're close to the end of your loan, just stick with the existing loan terms. Refinancing won't pay off.

How to Find a New Loan

If you think refinancing makes sense, then take your time to research your loan options. Talk to several lenders, including both banks and credit unions, to find out what your options are. You will find a bit of variety from one lender to the next, so it makes financial sense to do your homework.

Buying a new car takes time and research. Once you put in that time and find the right car loan and the right car, you can move forward with confidence, knowing your newly purchased car and loan will both be a good fit.

For more information on the best time to refinance, review our blog on how to refinance your car loan.

If you made a mistake by financing at the car dealership and you are wondering how long you have to wait before refinancing with Allegiance, review our blog "How Quickly Can I Refinance My Car After Financing With A Dealership?"

Источник: https://www.allegiancecu.org/autoloanebook

Automobile Finance Calculator to Calculate Vehicle Payment and Purchase Costs

IMPORTANT: Numeric entry fields must not contain dollar signs, percent signs, commas, spaces, etc. (only digits 0-9 and decimal points are allowed).

Click the Terms tab above for a more detailed description of each entry.

Step #1:

Enter the purchase price of the car.

Step #2:

Enter the sales tax percentage rate that will be applied to the purchase and indicate whether or not you will be wrapping the sales tax amount into the loan.

Step #3:

Enter the total of all fees due at signing and then indicate whether or not the fees will become a part of the loan. This includes fees such as title, transfer, loan, etc. Tapping the "+" icon will expand a mini calc for totaling up the costs.

Step #4:

Enter the trade-in allowance if applicable.

Step #5:

Enter the amount of your cash down payment if applicable.

Step #6:

Enter the term of the loan in the number of monthly payments.

Step #7:

Enter the financing interest rate.

Step #8:

Indicate whether or not you would like a monthly or annual amortization schedule included in the results.

Step #9:

Click the "Calculate Pmt and Costs" button and scroll down to see the results.

Источник: https://www.free-online-calculator-use.com/automobile-finance-calculator.html
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Источник: https://www.rydelloutlet.com/blogs/3631/how-much-should-i-put-down-for-a-10000-car
upside down car payment calculator

The Rules of Car Loan Refinancing

Access to a car is pretty much a necessity and a freedom that most Americans wouldn’t want to do without—even if car loan payments take a big bite out of their budget. In a 2018 survey conducted by the National Endowment for Financial Education, 15 percent of U.S. adults said they worried about their car loan debt. Whether or not you agree that owning your car is a financial burden, bringing monthly costs down is a good goal to have.

So the big question: When is it a good time to refinance your car loan? How about when you need monthly payments to be more manageable. That’s a good answer. But there are a few other things to consider. But first you should get a good understanding of how refinancing a car works so the route you choose meets your specific goals.

How does refinancing a car work?

Refinancing your car is a lot like refinancing your house; you’re getting a new car loan to replace the one you have. Here are the factors to consider to do that successfully:

  • Make sure your credit is strong. Get your credit report, which is free once a year, and check for mistakes that may lower your credit for i know the plans i have for you pictures. If there are any, get them fixed. Look for items you can pay down or off, especially anything in collections. Check your credit score, which is what most lenders use to determine how likely you are to repay your debts. It’s based on the information on your credit report like payment history, credit history length, debt levels, types of credit history. You can get your credit score free from Discover once a month.
  • Estimate your car’s loan-to-value (LTV) ratio. Unlike homes that can appreciate in value, cars depreciate in value over time. But like a house, you’ll need equity in your car to refinance. To start, you’ll need to determine your auto’s value and whether you’re “upside down” in your loan—meaning what you owe is more than the car’s actual worth. You can research your car’s current value on sites like Kelly Blue Book or NADA Blue Book before beginning the refinancing process.
  • Shop around for the best loans. Finding the best loan is essential so you get the interest rates and repayment terms that work for you. You can do this easily online by using your favorite search engine to compare offers. By not doing your research, you could overpay for your loan. Look for the shortest upside down car payment calculator term at the highest monthly payment you can swing. Remember, like home refinancing, your refinanced auto loan restarts the clock on your loan. Read the fine print on every offer to make sure it’s right for you.
  • Get your paperwork together. Besides proving your identity, lenders want to know you can pay your new auto loan back. So know what documents lenders want for the car loan refinancing process and set them aside. To be sure you have everything you need, contact lenders you’re considering and ask them what paperwork they require.

When is it a good time to refinance your car loan?

It’s most ideal to refinance your car loan when one of these three situations occur:

1. When your credit score has improved: Improvement in your credit score since you purchased your vehicle may mean it’s time to refinance. The higher your credit score, generally, the lower your interest rate for your auto loan and the better terms you’ll get for your car refinancing.

You could get a lower interest rate and have more of your monthly payment going to principal and not interest if you do. Over the life of your loan, refinancing to a lower interest rate may save you hundreds or thousands of dollars in payments.

Use a car refinance calculator to determine how much you could save over your car loan’s new term if you refinance.

2. When you need to reduce your monthly payments: If the amount of your monthly auto payment feels burdensome, you might reduce it by refinancing. When you refinance, you may be able to extend your repayment term, which may lead to lower monthly payments.

That could can you send money via paypal with credit card more income to put toward other monthly expenses. Run your numbers with a car refinance calculator to see how much monthly savings you’ll see.

Even if those numbers look good, make sure you’re not refinancing into a loan with a higher interest rate or less favorable repayment terms and conditions. Research the process upside down car payment calculator true costs of refinancing carefully.

When you think you’ve found the right loan, upside down car payment calculator clarifying questions of your lender about how refinancing a car works until you’re sure you understand your new loan before accepting.

3. When interest rates drop: If you finance your vehicle through your dealer, you may not have received the best interest rate. Start looking for better deals, identify one and refinance your car loan—especially if you see interest rates dropping. The best place to look may be a financial institution where you already have a relationship. If they don’t offer auto refinancing at all or at lower rates than what you already have, your next best bet may be your local credit union. Credit unions usually offer lower cost loans even if you have a low credit score. If you’re not a member of a credit union, you would need to join to get the best rates. But the cost of membership is usually low and the process worthwhile if you can get a good deal by becoming a member.

Can you refinance your car too soon—or too late?

Many people think it’s necessary to wait a set number of weeks or months to reading street 1st grade spelling words refinancing. Others wait too long to refinance their cars for it to make financial sense. Here’s what to know about refinancing timing.

  • You can refinance as soon as you buy your car. If your credit score is high enough and your financial picture strong enough to get better than your dealer-arranged financing, you can pursue refinancing. In some states, you need tag and title in place before you can start the process. But, in most cases, you don’t have to wait beyond that. It’s important you make payments until you get refinancing in place, however. Don’t assume starting the process and getting a firm offer of refinancing means it’s okay to delay payments. You may decide you don’t like the new loan terms at the last moment or you want to shop around more. You don’t want to jeopardize your credit or put yourself at risk of repossession by not making current payments on time.
  • Don’t wait too long to pursue refinancing. There are typically only two times it’s too late to refinance your car. The first is when you’re near the end of your loan term. If you have paid on your car for three years, do you really want to start a new loan term of five to seven years when there are only two years left on your current car loan? The only exception is if you’re refinancing a vehicle you leased because the lease term is ending, and you want to keep the car. Be certain you won’t end up paying more for the vehicle than it’s worth by extending loan repayment terms for those additional years. If you really must lower your car payment late in your loan term for financial reasons, it’s best to trade your current vehicle in for a less expensive one. The other time it’s too late to refinance your car loan is when you’ve had the car for so long it’s lost significant value and you’ll be upside down in your new car loan and your new loan is higher than the value of your car. That’s what you don’t want.
Источник: https://www.discover.com/home-loans/articles/the-rules-of-car-loan-refinancing/

Buying a car is a major financial decision. In fact, outside of your home, your car may be your most valuable possession. As you head into the dealership to start shopping for a car, make sure you do your homework. With a little bit of guidance you can find a great car at a great price, and get a loan that fits your needs. Before you shop for a car, take some time to read this guide to learn what you need to know about cars and car loans.


Here are the list of topics this e-book contains:

 

Best Time to Buy a Car and Get a Car Loan

When you need a car, you may not have the luxury of waiting until the "best time" to start your purchase, but if you have some flexibility, you can try to time the purchase around the calendar. Dealer incentives and the motivation of your salesperson can help you get a great deal on a car purchase, if you shop at the right time.

Choose the Right Month

First, consider the month you shop. Typically, October, November, upside down car payment calculator December are the best time to buy a car. There are two reasons for this. First, dealerships are nearing the end of their quota calendars at this time, and they are motivated to reach their annual sales goals. Second, dealerships are anticipating a flood of new vehicles for the coming calendar year. The current year's model will be discounted to account for this, because they need to move them out the door.

Choose the Right Time of the Month

Dealerships have quotas not only for the year, but also for the month. If they are not close to meeting their goals, they may offer better pricing or incentives if you shop towards the end of the month.

That said, the very last day of the month may not be the best time, but rather a few days before the month's end. Each dealership has its own time frame for quotas, and they may not sync perfectly with the calendar month.

Choose the Right Day of the Week

Finally, the day of the week you shop has an impact on the price of your vehicle. Weekends are prime shopping time for car dealers, so you can't expect a good price on a vehicle if you shop on the weekend. Instead, consider shopping early in the week, when the sales people are starting to look for new sales to increase their income for the coming week.

Holidays can also bring discounts on new vehicle purchases. Three specific holidays tend to bring big discounts on vehicles, including:

  • Memorial Day – If you're going to need a car in the summer, shop during Memorial Day sales for the best price.
  • Black Friday – Skip the lines at the retail stores and shop for a car instead on the busiest shopping day of the year.
  • New Year's Eve – New Year's Eve brings many dealerships to the end of their calendar years, so you have a holiday sale working with quotas to help you get a good price.

Timing Your Car Loan

Timing has less of an impact on your car loan than it does on your vehicle purchase. However, if a lender that upgrade wells fargo mobile app commissions on car loans, shopping toward the end of the month can help you get a slightly better rate or faster approval.

For more tips and other factors to consider while searching for your new vehicle, review our blog on the best time to buy a car and get a car loan.

 

What Is MSRP and How It Impacts the Sales Price

Once you've chosen the right time to buy your car, the next step is to learn about the prices you will see when you walk into the dealerships. If you understand the pricing on the sticker of the cars you're looking at, your negotiation skills will increase.

What Is the MSRP?

The MSRP is the "sticker price" on the vehicle because it's the price listed on the window sticker on the vehicle as it sits in the dealership. MSRP stands for "manufacturer's suggested retail price," and that's exactly what it is. This price is what the manufacturer suggests the dealership sells the vehicle for. This does not mean it is the selling price. It also does not mean it's the price the dealership paid for the vehicle.

What's Not Included in the MSRP?

The MSRP is simply a suggestion. It gives the dealership and buyer a starting point for negotiations. It does not include several things that impact the total cost of purchasing the vehicle, including:
· Destination charge – If the dealership had the vehicle shipped to the lot, it must pay the cost of that shipment.
· Dealer-installed options – If the dealership adds an anti-theft device or other option to the vehicle after arrival, that increases the price.
· Taxes, fees, and registration – These fees, mandated by the state, are non-negotiable, but will add to the cost of your vehicle.
· Dealership fees – Some dealerships charge additional fees, such as document prep fees, dealer prep fees, and advertising fees, which may be negotiable.

How MSRP Helps Buyers

The MSRP is a good tool to use to compare vehicles and to apply for your loan. It gives you a ballpark for what the vehicle will cost, and allows you to compare the cost of similar vehicles to each other. While it may not be your out-the-door price, it is a good benchmark to use as you shop.
The MSRP also gives you a starting point as you negotiate. If the dealer is highly motivated to sell, they will negotiate below this benchmark. However, you may actually pay more than this price. If you're shopping for a vehicle that's in high demand, the dealership can put an asking price on it that's higher than the MSRP. Remember, MSRP is nothing more than a how to use cash app card as debit more information on how the recommended selling price impacts your car loan application, review our blog on the MSRP meaning and how you can prepare for negotiations at the dealership.

 

Finding the Best Car and Car Loan for You

Now that you understand pricing and timing for your vehicle, it's time to start shopping. How can you find the best vehicle and the best car loan rates to make that vehicle affordable? By carefully considering your needs and then shopping based on those needs, you will quickly find the best loan and vehicle for your situation. Here is a step-by-step guide to finding the right car.

Step 1 – Consider Your Needs

The first step is writing out your needs. What, exactly, do you need in your new vehicle? Does it need to carry a certain number of passengers? Do you need to be able to haul a trailer? Is technology, like a backup camera or in-vehicle movie players, important to you? Make a list of the things you know you need in your vehicle, then make a list of the things you might want.

Step 2 – Set a Budget

A budget is helpful before you begin shopping. Typically speaking, your car payment should not be more than 15% of the money you bring home every month. You can find cars that are more upside down car payment calculator less than this amount, but keeping your budget in mind will help you shop smart. If you're not sure what the monthly payment would be for a specific price range, use an auto loan calculator to help.

Step 3 – Research Costs of Ownership

As you consider the vehicle that's right for your needs, you must consider all of the costs of ownership. Some things that can vary from one vehicle to the next include:
· Gas mileage
· Cost of insurance
· Cost for major repairs
· Vehicle depreciation
If you're trying to decide between a few similar vehicles, weighing these costs of ownership can help make your final decision.

Step 4 – Take Some Test Drives

Before deciding on the right vehicle for your needs, take some test drives. Sitting behind the driver's seat of a vehicle and feeling the vehicle's responses to your driving habits will help you find one that not only fits your checklist, but also feels great to drive.
Schedule some test drives before you start shopping in earnest. If you can, take the vehicle through some of your typical driving experiences, such as freeway driving or rural driving, depending on your commute. Look over the location of the various controls, listen to the sound of the engine, and even take time to listen to the stereo and sound system. Sometimes a test drive will help you rule out a vehicle you thought you'd love, and this will make your search for a new car easier.

Step 5 – Find a Loan

A car loan is an important part of the shopping process. You have three basic choices for your car loan. These are:
· Get a loan through the dealership
· Get a loan through a bank or credit union
· Get a loan through another lender, such as an online car loan company

If you choose to get a loan through the dealership, you will want to remember that car loans are a major part of their income. They are going to try to fit you into a monthly payment, and will work to negotiate the payment amount.

Instead, consider working how to transfer money from venmo to bank a bank or credit union. Get pre-approved for a loan early upside down car payment calculator the process, then shop knowing what you can afford to spend.

The one exception may be when shopping for a new car. New car incentives often include the car loan in the overall incentive package. Zero-percent financing or large cash rebates can make your new car purchase more affordable. Keep in mind that these types of incentives often come at a cost somewhere else in the process, such as a higher sales price or less value for your trade-in, so do your research before signing the loan documents. A search for the best cars available and conducting due diligence does not have to be a stressful or uncertain process.

Considering financing your car loan at a dealership? Before you head to the dealership, review our blog on the truth about 0% apr car deals and dealer rebates.

For more tips on how to save time and money, review our blog on finding the best cars and car loans for you.

 

Selecting the Best Used Car and Car Loan for You

If upside down car payment calculator shopping for a used vehicle instead of a new one, you may have additional considerations. While you will still want to follow the previously mentioned steps, including the test drives, vehicle research, and needs estimations, you will need to dig a little more deeply to avoid buying a lemon.

Here's how you can protect yourself.

Know Where to Look

If you're shopping for a used vehicle, you don't have to shop only with the dealership. You can also look in classified ads or shop online to find private sellers. If you buy from a private seller, make sure you carefully research your options and the seller to avoid scams. There are several steps you can take to ensure that the vehicle itself is worthwhile as well.

If you are considering buying from a dealership, review our Car Dealerships Secrets Revealed Guide. 

Check the Vehicle History Report

A Vehicle History Report is invaluable in your search for a craigslist san jose ca tools by owner car. The best used cars will have few owners and no accidents on their history. If you notice serious flaws on the Vehicle History Report, the price should reflect that. CarFax and AutoCheck are both popular websites that let you see the car's full history based on its VIN.

Have Your Mechanic Check it Out

If you get dougs hyundai edmonds about a used car from a private seller, ask if you can have your mechanic check it over before you purchase. A reputable seller will be willing to let you do this, provided they can come with you to the appointment. If the seller isn't willing to let you have your mechanic check the vehicle, chances are they are hiding something.

If you are considering purchasing from a private seller, review our blog on reasons why an extended car warranty is worth it.

Get a Used Vehicle Car Loan

Like new vehicles, used vehicles have three basic choices for car loans. However, you have fewer incentives to shop for aye myat thu new photo 2016 loan at the dealership, because the special financing offers are rarely available with used vehicle purchases. Instead, the best used car loans are typically through a bank or credit union, rather than at the dealership.

Still uncertain how to select the right car and loan for you? Be sure to review our blog on selecting the best used cars and car loan for you.

Be sure when you are performing your car loan search that you consider payment protection. Payment Protection allows you to rest easy knowing you're covered in life's most unpredictable events. It can include coverage options for life, unemployment, and disability payment coverage.

To learn more about Payment Protection, review our blog, "7 Questions To Ask Before Signing Up For Payment Protection."

 

 

What You're Missing in Your Search for the Best Car Loan Rates

Now that you know what to do to find the best used cars and new cars, the next step is to figure out the right car loan. The most important factor to consider in your car loan is the rate. Car loan rates are the interest rates charged for borrowing money to buy a car. Understanding how they are figured and where you will get the best rates is critical when shopping for a car. Car loan rates are based on the vehicle, your credit score, current interest rates, and the lender's requirements.

Credit Score and Prairie view a&m university spring break 2019 Car Loan

Your credit score directly impacts the rate. The better your credit, the better your rate. Checking your credit rating, and taking steps to improve it before applying for your loan, can help you get a better rate.

Choose the Right Vehicle

The vehicle you choose is apple juice good for you impacts the loan rate. Typically, car loans for new vehicles tend to be lower than car loans for used vehicles. This may not make sense to you, since new vehicles cost more. However, lenders look at the vehicle's value, and used vehicles tend to be worth less than new vehicles, so they have slightly higher interest rates. This protects the lender if you fail to make your monthly payments on time.

Watch Interest Rates

Car loan rates are based on federal interest rates. When those increase, so do the rates for car loans. When those drop, so do the rates for car loans. Consider applying for pre-approval from your bank or credit union when you see rates steadily decreasing, because chances are they will increase again in the future.

Shop Around

Finally, shop around carefully for your loan. Don't assume that your only or best option is at the dealership. While some buyers will find the dealership offers a good choice, they are not the only choice. You can, and should, approach multiple lenders if you're looking for the best rate on your car loan.

A car loan is a long-term financial commitment. Before you sign on the dotted line, be sure you are getting the best deal by reviewing our blog on getting the best car loan rates available.

Once you decide on the best car loan for your needs, be sure to consider Guaranteed Asset Protection if you are purchasing a new car. Guaranteed Asset Protection (GAP) covers the financial gap between what your car insurance covers and the outstanding amount of your vehicle or car loan.

For help deciding if GAP is right for you, review our blog, "5 Reasons Why You May Need Guaranteed Asset Protection (GAP)."

 

What You Should Know When Using an Auto Loan Calculator

An auto loan calculator is a great tool to use when shopping for a new or used car loan. It will help you understand not only the amount of your monthly payment, but also what different changes to your loan terms will do to that monthly payment. Here's how you can use one as you make your vehicle purchase.

What It Includes

An auto loan calculator allows you to input various aspects of your loan. These include:
· Term in months
· Interest rate
· Vehicle price
· Sales tax
· Down payment
· Trade-in

Once you input these values, you will see how much each month's payment is. You may also be shown how much in interest you'll pay over the life of the loan.

Calculate Your Monthly Payment

The best thing to do with a car loan calculator is to calculate your monthly payment. If you know the interest rate on your loan and your estimated car purchase price, you can plug that information in to the calculator to see the amount of your monthly payment. Change the loan's term to see how that changes your monthly payment amount.

Determine the Change Different Interest Rates Make

If you are shopping for different loans, a car loan calculator lets you see the difference they will make on your monthly payment and the overall cost of the loan. Even a change of just one percent can add up to big changes. Using a car loan calculator will show you those changes quickly, and this may motivate you to shop harder for a different loan.

Calculate the Difference a Trade-in or Down Payment Makes

Maybe you're considering selling your existing car first, or using it as a trade-in. Perhaps you're considering how much money to put down on the car you purchase. Again, a car loan calculator will help you decide how to handle these questions. By plugging in the values, you can see which choice makes the most financial sense.

For more information on how calculating your payment ahead of time can save you money in the long run, review our blog on auto loan calculator tips.

 

Looking to Refinance Your Car Loan? Here's What You Need to Know

Many car owners don't know that they can refinance their car loans. Doing so may let you get a better interest rate, shorter term, or lower monthly payment. If your current car loan is too expensive for your needs, or you want to pay it off more quickly, refinancing may be the option. Before you refinance, make sure you do your homework.

Research Pre-Payment Penalties

Before you refinance, check the terms on your existing loan. Many lenders charge a fee if you pay the loan off early. If you have a pre-payment penalty, understand how this affects your refinance.

Does Refinancing Make Sense?

Before you refinance your car loan, make sure it makes sense financially. Some reasons that it makes sense to refinance includes:
· Interest rates have lowered since the original loan. If the interest rate on a $25,000 loan drops from 7 to 5 percent, you can save about $10 a month and citi savings interest rate $2,000 over the life of the loan.
· Your credit rating has increased since the original loan. This can earn you a lower interest rate.
· Your financial situation has improved. This may 2019 jaguar f pace svr you to refinance for a shorter term, which, then, helps you pay off the car more quickly.
· You didn't research your options the first time. There may be a better loan out there if you take the time to research.
· Your loan is too expensive. Sometimes it makes sense to refinance if your current loan doesn't fit your monthly budget. A longer term can lessen the monthly payment amount.

When Does Refinancing Not Make Sense?

There are times when refinancing does not make financial sense. Here are some circumstances when you should just stick with your current loan:

· You're hoping to apply for a loan soon. If you know you're going to be looking for a mortgage or large personal loan in the near future, don't refinance your car loan. It will impact your credit rating, and could hurt your ability to seek your loan.
· The fees outweigh the benefits. You will pay fees to refinance your loan. Make sure you stand to gain more than you'll be paying to refinance.
· Your car isn't in good condition. A lender will only lend for a car that has value. If you're upside down, the car has significant damage or mileage on it, or it has little value for some other reason, your lender may not be willing to loan you the money you need.
· You're almost done repaying your loan. If you're close to the end of your loan, just stick with the existing loan terms. Refinancing won't pay off.

How to Find a New Loan

If you think refinancing makes sense, then take your time to research your loan options. Talk to several lenders, including both banks and credit unions, to find out what your options are. You will find a bit of variety from one lender to the next, so it makes financial sense to do your homework.

Buying a new car takes time and research. Once you put in that time and find the right car loan and the right car, you can move forward with confidence, knowing your newly purchased car and loan will both be a good fit.

For more information on the best time to refinance, review our blog on how to refinance your car loan.

If you made a mistake by financing at the car dealership and you are wondering how long you have to wait before refinancing with Allegiance, review our blog "How Quickly Can I Refinance My Car After Financing With A Dealership?"

Источник: https://www.allegiancecu.org/autoloanebook

How Much Should I Put Down for a $10,000 Car?

When you are purchasing a new or used car, you will need to determine whether you want to pay a down payment on the vehicle. Most people don’t have the cash to purchase a vehicle outright and rely on auto loans to acquire the car. When you’re taking out an auto loan, lenders may require you to make a down payment. If that’s the case, you will need to determine how much money to put down. Let’s take a look at what you need to know about this process.

What Is a Down Payment?

Handshake over an auto finance deal

A down payment is the amount of money you pay upfront when buying a vehicle. Some lenders require down payments while others don’t, but you may want to consider putting money down regardless of the requirements. If you don’t have the cash to put down, trading in your old vehicle is a form of a down payment as well. Your trade-in car’s value will be subtracted from the total loan amount, just like a cash payment.

Benefits of a Down Payment

Putting money down on a vehicle has its benefits. When you fully finance a car, you will be paying the car’s full cost with all of the added interest and typically end up owing more than the vehicle is worth. Putting money down helps to eliminate the financial strain by lowering your monthly payment, reducing interest, and keeping you ahead of the curve when it comes to the vehicle’s value. In the long run, you will be in a better position to trade in or sell the car when you have made a down payment.

Pay Less Interest

A down payment reduces the total loan amount. In turn, this lowers the total interest you will pay over the life of the loan. If you are taking out a three-year loan on a $10,000 car with a 4.5% interest rate, you’ll pay a total of $709 in interest. If you can put down 20% ($2,000), you will only have to pay a total of $567 in interest.

Loan Approval

Suppose you have a low credit score; paying a down payment can help you get approved for the loan you are seeking. Your credit score helps lenders weigh the risk they will be taking when giving you a loan. If you can’t make a down payment, lenders have more to lose if you aren’t able to make your payments, and they will have to repossess the vehicle.

Pay Lower Monthly Payments

Making a down payment can reduce the total loan amount and may lower your monthly payments in the process. Let’s say you purchase a car without a down payment. With a three-year $10,000 loan at a 4.5% interest rate, your monthly payments would be $297 per month or more if you include the sales tax in the loan. When you make a down payment of $2,000 and borrow only $8,000 for the same vehicle with the same interest rate over three years, your monthly payment would drop to $238 per month.

Offset Depreciation

Used cars will lose an estimated 15% of their value per year. New vehicles depreciate faster by losing around 25% of their value per year. When you can afford to make a significant down payment, you can help offset the vehicle’s depreciation and keep yourself from becoming upside down in a loan, where you owe more than what the car is worth. Since used cars lose value at a lower rate each year, they are often a better value than purchasing a new vehicle.

Should You Pay a Down Payment?

When a down payment isn’t a requirement, should you put money down anyway? There’s no simple answer to this question. If you have the money to spare or you’re trading in your old car, the answer is yes. The answer is no when you need a vehicle but don’t have the extra money or an old car with enough value to cover the down payment. If possible, you should always try to put money down upfront to help with interest and your monthly expenses.

How To Calculate a Down Payment

Some lenders will require a down payment regardless of your credit score or the cost of the vehicle. If this is the case, you will need to know the percentage the lender is asking you to put down. The more you can put down, the better, and it never hurts to have an old car to trade-in.

Let’s say you are financing a $10,000 car, and the lender is asking for a 10% down payment; you will need to put down $1,000 upfront. If you are trading in and your vehicle is worth $500, you will need to pay $500 cash. Auto down payment calculators such as the one found at Bankrate.com can help you run different scenarios when determining the ideal down payment for you.

Look Over Your Finances

Purchasing a vehicle is a significant investment regardless of its price. Take the time to look over your finances before you begin shopping for your next car. If you aren’t already using a budget, you may want to implement one before adding a new monthly payment to your existing bills.

A budget will help you allocate your income and give you an idea of the monthly payment you can afford. Organizing your finances into a budget will also help you determine how much you can afford as a down payment. Once you have these figures worked out, you will be ready to find and purchase a car.

Purchasing a car can be intimidating, but being prepared for the process can help alleviate any pressure you feel regarding your budget and down payment. When you know how to calculate down payments and interest rates, you will have a better understanding of the auto loan process as a whole. Do your due diligence and research the value of the car you are interested in, reviews of the lender you are using, and how the purchase will impact your finances.

Contact Rydell Outlet

Have any questions about buying used cars in Grand Forks? We can help. Get in touch with Rydell Outlet to learn more about putting down payments on a car and anything related to used car finance.

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Источник: https://www.rydelloutlet.com/blogs/3631/how-much-should-i-put-down-for-a-10000-car

Car Payment Calculator

 

Use this calculator to quickly estimate the monthly payments on a loan. Enter the amount borrowed, any application fees, the loan term & interest rate charged on the loan. This calculator defaults to monthly payments though you can change to using an alternate payment frequency. There are also options to add sales tax, trad ins and rebates to your calculation. The affordability calculator in the second tab allows you to estimate an affordable vehicle price based on your current savings and monthly budget.


The Complete Guide to Buying a Car

Authored by Jose Abuyuan on January 10, 2020

Purchasing a car is an overwhelming experience, especially for first-time buyers. With so many options and financial decisions to consider, the entire process can be taxing.

Before spending hard-earned cash, many buyers check if a new or used car is better. They negotiate different loan rates, terms and how much down payment to spend. Reviewing your auto deal is crucial to avoid long-term debt.  

Did You Know?

In 2019, the New York Federal Reserve reported that 42 percent of U.S. car owners said auto loans have caused them stress. About 36 percent of the respondents said they believe auto debt is more stressful than looking for a new job.

To help you out, our guide will walk you through the fundamentals of purchasing a car. We’ll also discuss vehicle depreciation and negative equity trade-ins.

Know the Alice tv series polly holliday Car to Buy

Woman choosing cars

Ask yourself what kind of vehicle you need. Your priorities must go beyond different models, features and fancy designs.

Assessing your lifestyle tells you what car and features to consider. Are you looking for a spacious family vehicle good for long driving? Do you need a compact sedan to drive around the city? Moreover, think about how often you’ll be driving and how far.  

Do your research. Make sure to compare prices and rates. Uninformed consumers make the mistake of choosing the first option when there are better offers.

Pigly's Tip!

Going to a dealership with a clear idea of what you want will make the process a bit faster. Be specific about what you want. Southern bancorp arkansas makes you less susceptible to upselling schemes. This way, you can avoid unnecessary features and costly extended warranties.

How Much Should You Spend?

Financial experts suggest limiting monthly car payments between 10 to 15 percent of your take-home pay. It’s a good rule that will help you avoid overspending. To get a better estimate, include this percentage into your monthly budget. It will give you a good idea of how much you can reasonably spend.

Pigly's Reminder!

To keep your overall interest payment low, aim for a loan term no longer than 6 years (72 months). Beware of 7-year auto loans that force you to pay more interest than the car is worth.

How Much Down Payment Should You Make?

Car website Edmunds.com recommends spending a down payment of at least 10 percent. Other finance experts suggest aiming for no less than 20 percent for new models, and no less than 10 percent for used units.

Credit Score Impact on Auto Loan Rates

Good credit score ratings

Higher credit standing affords you lower interest rates and much more favorable terms. It’s beneficial in the long run to save extra income.

Be sure to check your credit score before applying for a car loan. To get a free credit report, go here.

Credit bureau Experian published data on the average loan rates of buyers with different credit scores. The table below indicates that the average consumer spends more in interest if they have a low credit score.

Score Range Average Loan RangeAverage Term Length in MonthsAverage Loan AmountTotal Interest Paid
781-850 4.2% 63 $31,700 $3,700
661-780 5.0% 70 $33,500 $5,200
601-660 7.9% 73 $33,100 $8,700
501-600 12.2% 73 $29,400 $12,400
300-500 14.9% 72 $26,400 $13,700

*Experian data based on Q4 of 2018

High credit score buyers pay a total interest of $3,700, while buyers with the lowest credit score pay $13,700. That’s a difference of $10,000 in savings. Low dave baker firstbank score buyers are also assigned longer loan terms.

As of Q3 in 2018, Experian reports that the average credit score of borrowers who applied for a new auto loan was 717.

Lenders use different scoring systems to evaluate your credit score. These include FICO and VantageScore, which use the same credit report to evaluate your creditworthiness.

The most common credit scoring system is FICO, with scores that range from 300 to 850. It classifies credit standing into the following 5 bands:

FICO Classification Range
Exceptional 800-850
Very good 740-799
Good 670-739
Fair 580-669
Poor 300-579

If you have Good to Exceptional credit, you have a greater chance of being approved by lenders. However, a lower credit score does not mean you won’t get approved. You will find fewer lenders willing to approve your loan.

On the other hand, the following scale american heritage hours the VantageScore rating system:

VantageScore Classification Range
Excellent 750-850
Good 700-749 map of america and mexico
Fair 650-699
Poor 550-649
Very Poor 300-549

Likewise, under VantageScore, you must aim for Good to Excellent credit to obtain favorable rates. 

If you can wait to buy a car, take time to improve your credit score. You can do this by paying your bills on time, paying out existing credit card debt, and keeping your balances low.   

Pigly's Tip!

Before applying for a loan, review your credit report to dispute errors. This helps increase your credit standing so you can obtain better rates.

Get Pre-approved for an Auto Loan

Happy woman approved for loan

Many car experts recommend getting pre-approved for a loan before visiting a dealership. Based on Experian data from the first quarter of 2019, around 85.4 percent of new cars are financed with a loan or a lease.

Ronald Montoya of Edmonds.com says pre-approved financing is a practical way to afford a car. However, pre-approval does not always guarantee the lowest rate. Despite this reality, Montoya says it gives you a definitive baseline to compare rates to know which deal works in your favor.

In an NPR interview, personal finance auto editor Philip Reed also says the best advice is to get pre-approved. Knowing your budget limitations urges you to be more discerning about closing a deal.

Public Interest Research Group (PIRG) senior director Ed Mierzwinski gives the same advice in a CNBC, warning consumers about the rising auto debt rates. Pre-approval keeps the overall cost of your vehicle low. It ensures you can afford monthly payments to avoid defaulting on your loan.

Here are other benefits of getting pre-approved for a car loan:

  • Helps you stick to your budget – For instance, if you’re approved for a $35,000 loan, find a elizabeth banks hot images that costs a few hundred dollars lower. Don’t forget to factor in taxes and other fees in your budget.
  • Helps simplify negotiations – Knowing how much you can afford keeps you concentrated on the actual selling price. It can help you avoid lower monthly payments and longer terms, which is more expensive.
  • Saves time from more finance and insurance paperwork – Expect finance and insurance managers to pitch additional warranties. If you’re pre-approved for a loan, you can decline by saying your loan limit doesn’t allow extra costs.
  • Eliminates the risk of ‘spot delivery’ issues – Spot delivery occurs when dealerships deliver your car prior to bank financing approval. It also happens when they let buyers with unstable credit take a car. This scam misleads consumers into thinking the deal is final. If you what is the capital city of oregon papers without bank approval, the dealership can renegotiate the agreement. They can even take back the vehicle if you cannot secure financing within a period of time.

New Cars vs. Used Cars

Old vs new car model

The decision to purchase a new or used unit usually comes down to two factors:

1. How much money you can spend.

2. How long you want to keep the car.

Whether you choose a new or used car, know the pros and cons below.

New CarUsed Car
PROSCovered by warranty   Used cars from pre-certified dealer programs are less than half the cost of a new unit  
Has higher fuel efficiency   You can find late-model units with low mileage in really good condition  
Comes with the latest safety features  
Most new cars come with emergency name of jacksonville jaguars stadium assistance service  
Pre-certified used cars often have strong warranties, including factory warranty and a chance to buy extended warranty  
No need to worry if the car had previous maintenance issues   If you are skilled in car repair, it can reduce your acquisition cost

If you have a good credit score, many lenders provide financing with low or zero interest rates for new cars  
Depreciates slower
Lower maintenance cost for 2 to 3 years  
CONSMore expensive than used carsCan be harder to find the exact car and features you want  
Comes with higher insurance cost than used units Can have reliability and undisclosed maintenance issues
Value declines more quickly, with new cars depreciating by thousands of dollarsBuyers need to perform routine maintenance sooner compared to new cars
You shoulder higher debt – new cars depreciate faster compared to used models You are not protected if you end up buying a lemon. Lemon laws vary per state and only apply to cars of a certain age with specified mileage.

Choosing New Models

There are owners who prefer to use their car for a long time (6 years or more) before buying a brand-new unit. Other drivers purchase rare luxury models which they intend to keep.

Buyers who choose new models believe it’s a worthwhile purchase. First, they do not worry about previous damages and costly routine repairs. It’s certainly the preferred option for consumers who prioritize dependability and safety.

New cars also perform better than used units in the first 2 to 3 years. As the first owner, you can keep track of your vehicle’s condition and make sure it is well-maintained.

Some rare cars may also increase their value over time. Think of expensive vintage cars which are now prized collector’s items.

Consumers Who Prefer Used Cars

These days, many car owners trade their unit after 3 to 5 years. They are happy to get a used model with relatively lower mileage. While it may be challenging to source a specific car, you can still find low-mileage vehicles that look and work almost like new.

Used cars are much more cost-effective because they depreciate slower. If you are on a tight budget with limited financing, this is a practical option for you.

People buy quality used cars with a hundred-thousand miles. They drive them for a hundred-thousand miles more. In terms of reliability, many used cars in the market still perform quite well.

Ultimately, the choice to purchase a used or new unit will boil down to your needs. At the end of the day, make sure to get the most out of your purchase.

The Dangers of Negative Equity

Car sinking underwater

In the auto industry, ‘negative equity’ occurs when a consumer’s compounding debt surpasses the car’s actual value. When a car owner trades in a unit that is not fully paid, they roll over their existing debt to the new loan. This financial practice is risky, leaving car owners prone to neverending debt.

In November 2019, the Wall Street Journal reported that there is a growing number of buyers with negative equity. According to the report, in 2009, an estimated 19 percent of consumers traded in cars with negative debt. By 2019, the rate has increased to around 33 percent. Today, many of these consumers are at least $5,000 in debt.

To avoid this debt trap, do not buy a upside down car payment calculator car when your previous debt is unpaid. Do not go to Buy Here Pay Here dealerships that impose high rates and long payment terms. It’s better to save up and improve your credit score before buying a car.

When is it Beneficial to Lease a Vehicle?

Car rental options

Car leasing allows you to drive a new car without making large monthly payments. This option is ideal if you are building your income or not ready to take a loan.

It’s an affordable way to ‘rent’ a vehicle if you cannot commit to buying a new or used unit. Generally, leasing allows you to drive a car (usually for 2 or 3 years), not own it. You can choose this option if you are not yet sure about owning a vehicle.

Similar to a loan, you give monthly payments according to agreed terms. It also requires you to pay a down payment.

By the end of the lease, you typically return the unit to the dealership. Take note: a lease contract must specify the option to buy the unit in case you want to keep it. Otherwise, you cannot purchase the vehicle from the dealer.

The table below runs down the pros and cons of leasing a car.

Pros Cons
Lower monthly payments   Monthly payments don’t go towards equity / car ownership  
Smaller down payment Not all lease contracts allow you to buyout your lease at the end
Get warranty coverage and maintenance  Costs more in the long run for a car you do not own
Allows you to drive the latest modelsThere may be many penalties and fees by the end of the lease
No need to worry about selling or trading the car when the lease is doneYou cannot customize the car’s features
 If you need to move, getting out of a lease is expensive. The dealer might not allow you to take the car.

Leasing to Average Consumers

In the past, people generally leased luxury models. But according to Consumer Reports, the leasing market has changed for the auto industry. More sedans, compact vehicles and small SUVs are now leased to average consumers.

A growing number of dealers now offer lease terms below 36 months. A short contract might be attractive, but cars depreciate fast during the first 2 years. This means you will likely pay expensive penalty fees for exceeding normal wear and tear. When this upside down car payment calculator, some drivers opt to buy out their lease.

How is an auto lease payment calculated? Monthly payments are calculated according to the vehicle’s depreciation rate.Car depreciation refers to the change in the unit’s present value and its value by the end of the lease, which also includes interest and fees.

Types of Auto Lease

  • Closed-end Lease – You do not pay more when you return the unit. But you need to pay penalty fees if the car needs plenty of repairs. You also pay extra if you exceed the agreed miles. If the vehicle’s worth becomes less than the agreed amount, you will no longer have financial obligations.
  • Open-end Lease – This lease does not specify the upside down car payment calculator of the car in the contract. By the end of the lease, you may get a refund if the unit’s value turns out more than expected. If it’s worth less, you will likely have to pay more.

Does Credit Score Affect Leasing Eligibility?

Yes, you need good credit standing to qualify. Credit bureau Experian states the average FICO credit score to get approved is 725. But generally, if your credit score is 680 and up, it is easier to get a lease.

When is it Worth Buying a Leased Car?

According to Edmunds.com, you should ask the following questions before buying a leased unit:

  • Is the car in good mechanical condition? – Vehicles in good condition do not entail costly maintenance fees.
  • Have you gone beyond the lease’s mileage limits? Did the car incur damages? – Once you complete a lease buyout, you will not be fined for exceeding the mileage or for any damages. Consider your penalty upside down car payment calculator. Buying might be more practical than paying expensive fines.
  • Do you have enough funds for the buyout? – Buying out a lease by making a new down payment will make your monthly payments manageable. Otherwise, your monthly payments will increase, making outer banks rentals airbnb more costly than your actual lease payment.

The Best Time to Buy a Car

Woman happy over Christmas car sale

Car prices change depending on the month, time of the week, and even the time of the day.

The best time to shop for a car is influenced by customer traffic and monthly sales deadlines. Going when there are fewer buyers increases your chances of getting a good deal. It’s also beneficial to take note of end of the model year sales to secure good terms.

Here are the best times to visit a dealership:

Shop at the Beginning of the Week

Ideally, you should shop early in the week, between Monday to Wednesday. Dealerships are crowded during weekends, which means you get less personal attention. It’s easier to negotiate more favorable terms when a salesperson is focused on your needs.

The Latter Part of the Month and Towards the End of the Year

Sales agents have monthly, quarterly, and annual sales targets. They are extra accommodating if closing your deal will help them reach their quota.

Going to a dealership by the end of the month can help you negotiate better terms. However, take note that sales deadlines do not t mobile familywhere app fall on the 30th of the month. You should shop around the 26th to 28th to secure more promising offers.

Pigly's Tip!

The best time of the year to buy a car is during the months of October, November, and December. Buyers get the most discounts during these months. Holiday sales like Black Friday and New Year’s Eve will also help you secure a good deal.

According to Edmunds.com, the least discounted months fall on January to April. You also get better discounts between May to September. But it’s wiser to buy your unit later in the year.

Buy the Current Year’s Model Once Next Year’s Model is Out

Dealerships need to sell old units to make room for the new ones. If you buy this year’s model when the new one arrives, you can get a good discount.

Car makers usually release new models in the summer. Keep track of this schedule and you might lock in a better deal.

Understanding How Cars Depreciate

Man pushing old car

Cars depreciate in value the moment you drive it out the lot. It can lose 20 percent or more of its initial value in the first year. By 5 years, it loses around 60 percent of its original price.

After one year, however, depreciation rate americas tire santa maria evens out. This is why used cars typically do not depreciate as fast compared to new models.

Managing Vehicle Depreciation

The best way to manage depreciation is through regular car maintenance. While you’re at it, keep all your service records. Units that do not get routine checks and repairs usually depreciate faster. In the long run, they are harder to sell.

Eric Ibara, director of residual value consulting for Kelley Blue Book, states that one of the best ways to manage depreciation is to limit car mileage. This is not the most realistic recourse, however, baby doll furniture walmart many people rely on cars for daily use.

Moreover, Ibara says that what passes as high mileage depends on the vehicle. When certain models incur more miles than usual, risk of faster depreciation rises. For instance, if you have a Ferrari 488 GTB with 16,000 miles, that has high mileage. This is because luxury cars are not driven frequently by the average consumer.

Pigly's Tip!

Another way to avoid high depreciation is to stay away from creative add-ons. Features like aftermarket bumpers and loud mufflers will decrease your customer service capital one phone number value. Your vehicle’s color can also affect its resale price. Personalized colors like bright green, yellow and violet make cars difficult to sell.

The Bottom Line

Buying cars come with many challenges. But if you are a well-informed consumer, you can avoid unfavorable deals. Whether you choose to buy a new or used unit, or lease a car, will depend entirely on your needs. Finally, be sure to check your credit score and secure financing before going to a dealer.

For more information on how to save for major purchases, visit this page.

About The Author

Jose Abuyuan is a web content writer, fictionist, and digital artist hailing from Las Piñas City. He is a graduate of Communication and Media Studies at San Beda College Alabang, who took his internship in the weekly news magazine the Philippines Graphic. He has authored works professionally for over a decade.

Источник: https://pigly.com/auto/

Auto Loans: What You Need to Know

Whether you are shopping for a vehicle or wanting to refinance, the process is less stressful when you already know what to expect. It is important to understand how and when to obtain financing for your vehicle.

Is it best to apply for a loan before or after I find a car?

It is not uncommon to get a pre-approval before you know what car you want to buy. However, once you find the car, you will need to provide your loan specialist with the car information to make sure it meets loan requirements. A pre-approval gives you negotiating power when you are shopping for a vehicle. It will make the car buying process smoother for you because you already know the loan amount for which you qualify. You can get pre-approved by applying online or by phone at 316-383-1234.

If you decide to apply for a vehicle loan before you have found the perfect car, we may be able to provide you with a pre-qualification letter to take to the dealership to begin your shopping experience. Not all dealerships will accept pre-qualified letters, so be sure to call in advance to confirm. If you already know what vehicle you would like to buy, we can work with you and the dealership to provide a loan for the vehicle, skipping the need for a pre-qualified letter. Having full vehicle information and an idea of the purchase price can speed up your loan approval process.

How long does a pre-approval last?

An auto loan pre-approval with INTRUST Bank is valid for 30 days. 

What qualifications does the car have to meet to be financed?

Generally, the vehicle should be newer than 10 years and have less than 80,000 miles. However, financing may be available for vehicles outside of those qualifications. The vehicle must be in good condition. It cannot have a salvage, rebuilt salvage, or non-highway title.

What finance restrictions do I need to be aware of if this is my first time buying a car?

If you are a first-time car buyer, we can help you understand your financing options and walk you through the financing process. Vehicle requirements for first-time buyers are: 10 years old or newer, fewer than 80,000 miles, borrowing under $15,000, and maximum 80% loan-to-value. The loan-to-value means you can only borrow 80% of the vehicle’s value, so you may need a cash down payment for your vehicle purchase. 

How do I apply for an auto loan and how long does it take to get approved?

You can apply by phone at 316-383-1234 or complete a full application online. The approval process is quick, and some online applications can result in automatic decisioning shortly after being submitted. If more information is needed before your application can be approved, we will reach out to you. Depending on the time of day you submit your application, you could receive a decision the same day.

How much should I use as a down payment?

Generally, you should budget to put down at least 20% on a new vehicle and 10% on a used vehicle. This will help you keep your monthly payments low and prevent you from owing more on the vehicle than what it is worth as it depreciates.

What factors affect interest rates on auto loans?

Some factors that can affect your interest rate on an auto loan are the length of the loan, your credit score, mileage of the vehicle, and the age of the vehicle. Use our online calculator to estimate how these factors can impact your loan terms and payment amount.

How do I know what interest rate I would qualify for?

You can easily calculate your estimated interest rate with our rate calculator, where you can evaluate how your FICO credit score and vehicle details impact the rate.

How do I get a copy of my credit report?

Federal law mandates that individuals are allowed a free copy of their credit report from all three reporting agencies every 12 months. To request your report, visit annualcreditreport.com.

How do I calculate my monthly payment?

To calculate your monthly payment, first use our rate calculator to estimate the interest rate for which you qualify. You can then use our monthly payment calculator to adjust your car loan details to calculate your monthly payment.

How much can I afford to borrow?

If you are unsure how much you can borrow, you should start by evaluating your monthly budget. If you need some help getting started, our Helpful Tips For Your Next Auto Purchase article will guide you. From there, you can determine a monthly payment that will fit comfortably in your budget. Our online calculators can quickly estimate various financing options that fit your needs.

What is depreciation and how does it affect the vehicle I purchase?

Depreciation is a decline in value of a vehicle as it gets older due to wear and tear. The amount of depreciation can vary depending on the vehicle year, make, and model. When you purchase a new vehicle, it will lose value rapidly in the first few years but then slowly start to level off. This means that what you paid for the vehicle is no longer what the vehicle is worth. Depending is smoking weed once bad for you what your plan is, depreciation may not be a factor to worry about. If you are planning on keeping the car for a while, you will be paying on the depreciation, so it won’t impact you as much as if you wanted to sell or trade it in a few years after purchase.

Is it better to buy a new or used car?

Deciding whether you should buy a new or used car depends on what is right for your budget. When you purchase a new vehicle, it will undergo more depreciation in the first few years than if you bought a used vehicle. The used vehicle will still depreciate, but it will be at a slower rate than the vehicle fresh off the car lot. The advantages to buying a new car are that it will most likely be operationally sound, and if there is an issue, the repairs are typically covered under a factory warranty for a period of time. Additionally, new cars often have new safety and performance features that a used car may not. With a new car, the shopping process can be easier since there is most likely an abundance of the make and model of the car you like, and you don’t have to verify if the car has been in any accidents.

If you choose to buy a used vehicle, you can save a considerable amount of money because the vehicle depreciated rapidly the first few years, making it much more affordable than had you bought it new. Some advantages to buying a used car are lower insurance rates and registration costs, and you can shop well-made vehicles that you may not have been able to afford brand new. However, you should be mindful of what repairs the car might need soon, and ensure the vehicle has a mechanical evaluation before purchase. You should understand any warranties included with the vehicle through the dealership. Unlike a new car, you will not know the full history of the vehicle, so you should request a vehicle history report from the dealer to know if the vehicle has been wrecked or undergone any title changes.

What is the difference in a co-applicant and a cosigner?

A co-applicant is an additional borrower on the loan, typically a spouse, for a joint purchase in which both applicants are liable for the loan. The co-applicant allows for additional income to be considered to more easily meet debt-to-income standards.

A co-signer is typically included on a loan when a borrower does not qualify on their own due to good but limited credit. Since all co-signers are 100% responsible for the loan repayment, even if a co-signer does not directly benefit from the loan or own the collateral, a co-signer should be utilized cautiously and be someone with whom you have an established relationship.

How can I add a co-applicant or cosigner to my loan?

Co-applicants and cosigners are added at the time of application. If you are applying online, there is an option to add an additional applicant. If you are applying in person or by phone, make sure to let the banker know you are wanting to add a co-applicant or a cosigner.

What does it mean to be "upside down" on my auto loan?

When you are “upside down” on your auto loan, you owe more on your loan than what your vehicle is worth. This is also known as negative equity. If your budget allows it, a possible solution is to apply more funds to the principle of your loan in addition to your regular monthly payment. 

Can I pay off my car loan early?

Yes, you may pay off your INTRUST loan early with no penalty fees. You can do so by paying more than your minimum monthly payment, making additional payments over the course of the loan, or applying a lump sum to your loan balance. Your loan documents will provide detail on how payments are applied. 

Should I refinance my car?

Refinancing your car could be beneficial if you are wanting to make changes to your loan, such as lowering your interest rate or lowering your monthly payment. If you have a high interest rate and believe you can get a better rate now versus when you got the loan, you could save more in interest as long as you do not extend the length of the loan too far out. If your goal is to lower your monthly payment, and you are okay with extending out your loan term, refinancing could be a good option. Lengthening your loan term may result in you paying more interest over the life of the loan.

To apply for an INTRUST Bank auto loan, visit our online application or apply by phone at 316-383-1234. St regis dc our auto loan calculators to help you estimate how much you could finance and the approximate payment amounts.

If you have additional questions, contact us at 316-383-1234. Representatives are available Monday through Friday, 7am to 8pm and on Saturday from 8am to 6pm. To reach our 24/7 automated phone banking, please call 1-800-895-2265. 

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Источник: https://www.intrustbank.com/article/auto-loans-what-you-need-to-know