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November 12, 2015

Choosing the best way to Finance your New Car

Car financing ideasBuying a car is not a simple decision to make and you have probably spent quite a bit of time thinking about it. From choosing the type of car you want to thinking about how to finance it, you need to put a lot of serious thought into the decision you are making. Once you have settled on make of vehicle that you want, it is time to start thinking about how to pay for it. So which is the best financing option for you?

Buy in cash or savings?

Buying your car on your savings is the best option when interest rates are low on your savings account yet you have enough savings. It is much better than keeping the savings with a low interest rate and borrowing a personal loan at a higher interest rate to buy the car. You can also combine your savings with a personal loan that covers a partial cost of the vehicle.

It is advisable to only use your savings when you have enough to leave some for emergency costs after paying for the car. If you do not have enough savings to pay for the entire price, you can use it to give the biggest deposit possible and reduce the car loan repayment amount.

Personal Loans

Personal loans are the cheapest way to finance a vehicle if you have a great credit score. Personal loans are available from banks, building societies and other finance providers. Avoid securing personal loans against your home as you will be at risk of losing it if you do not make your payments on time. You can shop around for personal loans from the different institutions available. The only challenge with taking out personal loans is that it may take some time to receive the funds and it will affect your other borrowing options.

Hire purchase

This is a way of buying certified pre-owned cars through paying in installments. You need to put down a deposit and make the rest of the payments for the vehicle between 12-60 months. Hire purchase programs are arranged by the vehicle dealers and can be very competitive for brand new cars. You do not own the vehicle until you make your last payment.

Hire purchase is a great option for you if you are in a rush to purchase your vehicle and cannot wait for finance provider protocols. The deposit can be as low as 10% with flexible repayment terms and competitive interest rates. The only challenge with hire purchase is that it may turn out be more expensive for short-term agreements.

Personal contract plan

A personal contract plan is a special car financing option that is a variation of the hire purchase option but with lower monthly payments. This personal contract plan is where you agree to pay the difference between its sale price and price for resale back to the dealer based on a forecast of annual mileage. It is a short term plan usually with a maximum of 36 six months after which you can give back the vehicle to the dealer at no extra cost, trade in the vehicle for another one or pay the resale cost of the vehicle and keep it. This payment plan is great if you do not want to settle on one type of vehicle, it is also much cheaper with a choice of what to do at the end of the payment period.

Grace Malloy is a loan officer with a lending firm. You can read more about your car financing options at Ideal Auto USA.

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March 10, 2014

Looking into the Golden Guidelines of Good Car Finance Choice

Choices to finance your carSelecting a car finance service involves different aspects. You need to be sure on different levels. First, you have to find the best car meeting your preferences. Next, you must choose a good dealer who handles both buying and selling of cars. Finally, the customer has to select a suitable car financing service. Look up a website where all three parameters converge and transmute in a fluent system. You can find good sites where they connect you to the dealer after you provide the necessary inputs. You just need to type in your area zip code, and get dealer addresses right away. The financing packages should be convenient. The company should have a good customer support department. See if the support staff can help you in choosing a new automobile. Always ensure the loan service adheres with the golden guidelines of transparency, smartness, and helpfulness.

Clarity in lending parameters

The company should maintain optimum clarity in lending parameters. Vague agreement conditions imply risky financial transactions. A simple car loan can ruin your life if you sign in to the wrong agreement. Always make sure you look critically to the terms and conditions. Connect with the support staffs if you find any part difficult to interpret. It is their usual job responsibility to explain all aspects lucidly. Evaluate the helpfulness of the professional at the other end of the phone. Ask whether the advertised rate is tax-exclusive. Inquire if the service levies additional charges. Verify the fixedness of the agreement during a loan tenure. Assess the practicality of the loan window. See whether you can accommodate the expense easily in your monthly budget plan.

The down-payment issue

The primary down-payment is vital. The best professionals always suggest clearing as much as you can in the first installment. If you deliver a lump-sum amount in the beginning, the loan value decimates significantly. The monthly responsibility becomes easily bearable. You can procure a handy amount by selling your old unit. Contact the dealer in seeing the price he can offer. Market conditions are such that you cannot expect a very high value on used units. Due to the mass-production factor mainly, the costs of used cars depreciate drastically nowadays.
The value drops to less than half the original amount in only a couple of years. You should research on used car rates. Find the reigning industry trends at automobile forums and review websites. You can easily negotiate with the dealer when you have a clear idea on the standard rates. Consider verifying whether the agency handles car salvation. The salvage automobile dealers are better payers than the junkyard agencies are.

The credit score issue

You may have a dismal credit rating. It is unnatural to have a good credit rating nowadays. You can confirm this from any random person on the road. The ambiguity and complexity of credit rating parameters bring down the values to drastically low amounts. You cannot help it because the economy is in a difficult state. The Government needs to compensate the huge national debt aspects. Your debt payments contribute in solving the crisis. So, you should not feel guilty because of a low score. Instead, you must celebrate your free spirit on the new cars. The lending service must have a similar attitude to credit ratings. A good service delivers on financial help promises irrespective of the credit ratings.

Evaluating all essential aspects soon ensures you are behind the steering wheels of your shining car. The dealer should hand over the keys right on the spot when you make the first installment payment. You chose the car after a test drive. You like how it moves. The overall feeling is immensely gratifying. Enjoy your new life in the transit cocoon. The car will be all yours only after a few convenient monthly payments.

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February 8, 2014

Ways to Save Your Insurance Company Doesn’t Want You to Know

Insurance promisesEvery car insurance company promises you their very best rate. They also promise to make you an offer that their competition can’t top. In other words, insurance providers make promises they can’t keep. So, what can you do to make sure you get the best deal on the market? Make your own.

Consumers know that it pays to shop around. Smart buyers compare quotes from several insurers before purchasing a policy. However, even the savviest shoppers probably don’t know that after they’ve found the best coverage at the lowest rate there are ways to save even more.

How? It’s all about research. Car insurance companies will be quick to talk you into their most comprehensive coverage. On the surface, the old adage—more is better—appears to ring true. What these companies won’t tell you, though, is that these top-tier policies are excessive for everyday drivers. And in this case, excess is expensive. By taking a thorough look at your driving habits, vehicular assets, and overall financial situation, you can determine how much coverage you actually need.

Do you drive every day, or just occasionally? Is your commute 15 minutes, or 50? The answers to these questions matter. The more time you spend behind the wheel, the more likely you are to be involved in a collision, statistically speaking. Naturally, the converse is true. If you only net 15 road miles each week, you aren’t as likely to cash in on your policy. Many insurance representatives are trained to ask these questions when providing a quote. If yours never did, it’s time to make a phone call. And if you recently changed jobs and are now working closer to home, you should update your insurance provider; it’s likely that they will lower your rate.

What you drive matters just as much as how you drive. Unless your vehicle is new or you’re still making payments on an auto loan, you might be carrying more insurance than you need. Check the Kelley Blue Book value of your car. If this figure is significantly lower than your comprehensive or collision coverage, it may be time to adjust your policy accordingly. In some cases, as for those who drive old (but not collectible) cars, it could be worth dropping collision coverage entirely.

Choosing a plan with a higher deductible might not sound like a good way to save money. However, drivers with a great safety record can cash in big with this strategy. Here’s the logic: safe drivers are involved in fewer accidents. By raising your deductible, your insurance costs drop—sometimes an increase of just a few hundred dollars means a 15% to 40% reduction in overall policy fees. A portion of the money saved on premiums can be set aside to cover the deductible in the event you need to file a claim. The remainder of this money is then free for investment or can be put towards purchases you actually want to make.

Having your financial ducks in a row pays off. Many auto insurance providers will now review your credit score and reward fiscal responsibility with discounts. When you’re looking to spend less on car insurance, be sure to inventory your other expenses. Check for duplicate coverage. For example, AAA membership offers roadside assistance and towing. There’s no sense in carrying policy add-ons for these services if you’re already getting them elsewhere. This is also true for bodily coverage. If you carry a fairly comprehensive medical insurance policy, it is likely that any bills resulting from accident-related injuries will be taken care of.

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November 26, 2013

How to borrow money against your car

Loan for your carThere are many reasons why it can sometimes be a good idea to borrow money. It can make it possible to invest in assets in a way that makes financial sense – for instance, taking advantage of a discount on a new sofa that’s really needed, where the saving amounts to more than the interest on the loan. It can be about consolidating debt, using one big loan to pay off several smaller ones, which often results in lower overall interest payments and better terms and conditions. In some situations, it can be necessary to meet ordinary household expenses whilst waiting for a salary payment, especially if one has a variable income or creditors that are slow to pay. Getting a loan to pay for transport costs can also make sense by making it possible to stay in work and thereby keep bringing some money in. Whatever the reason, it’s something that should be approached with caution – and with a clear plan for paying the money back firmly in place.

Borrowing options

The simplest way for most people to borrow money is by getting a loan from the bank, but rates can vary a lot and people with poor credit records may struggle to do this at all. Social fund and credit union loans can be a good bet but what’s available can vary by location. The Citizens’ Advice Bureau can provide guidance on this. Credit card loans can sometimes be a good way to borrow, within agreed limits, but can be very expensive if not paid back on time. Payday loans with dedicated lenders work for many people but should not be taken on without a careful assessment of what their interest rates really mean if you are late in paying. Store card loans are sometimes worthwhile when they also offer deals or discounts, but can be very expensive and should be treated with caution.

Generally speaking, loans are easier to get if secured against an asset like a house or car. These are known as secured loans. It is important to be aware that the asset could be at risk if the terms of the loan are not met. When taking out a loan it is a good idea to avoid the comfortable assumption it will be paid off on time and make a back-up plan for what can be done if that doesn’t happen.

Borrowing on a car

Thinking about the assets they have available, many people are quick to say “I’ll borrow money on my car!” As with all loans, there are good and bad ways to approach this.

Various different types of loan can be secured against a car, so it’s wise to shop around for a good interest rate. The most common type, logbook loans, mean that the lender technically owns the car whilst the loan is outstanding, but it’s still available for the borrower to drive. A good lender will not simply take the car if things go wrong but will work with the borrower to come up with a workable repayment plan.

Although they can be expensive, loans against cars generally provide a reliable way to get a large sum of money in just a few days, regardless of credit history. They’re generally cheaper than payday loans as the existence of collateral lowers the risk for the lender.

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May 26, 2012

Pro Tips For Those Seeking Car Finance

Buying a car is a big financial investment. Most people are not able to pay cash for their new vehicle and must rely instead on car loans to make their purchase. In order to be able to make lower monthly payments, many people are now taking out loans that can take up to five years to pay off. The interest charges on these loans are quite high. By the time the car is finally paid off it will have cost many thousands more than if cash had been used to make the purchase.

In order to avoid the large outlay of money involved in buying a new vehicle, many individuals instead choose to buy a used car. This is certainly an option for some, but people who wish to own a new car can save money by following a few rules that make car financing less costly.

1. The first thing to remember is that cars are depreciating assets. As soon as a car leaves the lot it has lost several thousand dollars in value. Every year the car is worth less and those financing their car for five years are left with an asset that does not have much value. The best policy is to save as much cash as possible to pay for the car. Not only will this save a lot of money in interest over the years, it also puts the buyer in a position of power when negotiating car prices.

2. Decide on your budget before going to look at cars. Avoiding emotional buying is easier when you know how much you can realistically afford. Determine how much of a cash down payment you can afford without having to make sacrifices. There are websites that have loans calculators that allow you to check how much loan payments will be for various car prices.

3. Do comparison shopping of loans online. There are many websites that offer car loans at affordable rates. Getting a car loan at the dealership is not always the best option since every warranty or add-on that is purchased with the car will be added onto the loan and result in extra interest charges. Obtaining a loan before going to the dealership allows you to negotiate for a better deal. Do not immediately offer to pay the full price of the car. Car dealers expect to negotiate and the given price is never set in stone.

4. Car dealers love to up-sell their customers. Typical up-sells include extended warranties, rustproofing and fabric protection. Warranties can be purchased directly from the warranty provider. Car dealerships are only the ‘middlemen’ and stand to make a profit by selling them. Rustproofing is only necessary if you live in a place where a lot of salt is used on icy roads in the winter. Fabric protection is a personal choice but not generally necessary given the depreciating nature of vehicles.

5. Avoid negotiating ‘packed payments’. If the dealer tries to sell you a car based on the monthly payment you have to make, rather than the whole purchase price, be aware that this can add up to much more than the amount needed to cover the cost of the car.

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