The reason we compare car insurance quotes from multiple car insurance companies is to make sure we’re getting the best rates possible. Of course nobody wants to pay more money than they have to, but in the other hand we also want to make sure that our car insurance company is going to respond quickly and fairly in case of an accident.
What is unknown to many is that there is not one single car insurance company that is cheaper than others. One particular car insurance company can be the cheapest for one person but the most expensive for another. Each car insurance company has a certain category of drivers they want to insure. If you fit their category they will offer you a cheap rate, if you don’t, they will offer you an expensive rate. That is their way of filtering the people they want and do not want to insure. That is the reason we need to compare insurance rates from multiple car insurance companies, to find out which company will offer us the cheapest rate. The key is to find the company that offers the cheapest rate for you, but of course, it is important to compare rates from quality companies only.
There are many quality car insurance companies out there; however, some of those quality companies also have a high price to go along with them. How do we find a quality company for a cheap price? That, my friend, is the key question.The traditional method of shopping for car insurance is to call around which we all know can be a long process. Another drawback of shopping for car insurance by phone is the probability of getting caught with the old “bait and hook” trick. That is when someone gives you a low quote by phone and hikes it up on you when you go into their office to purchase the car insurance policy.
In today’s world, luckily, we have the internet. The internet makes life a lot easier for all of us. Using the internet, we can shop for many types of things we may need which include shopping for car insurance.
Shopping for car insurance online is the best way to compare rates from multiple car insurance companies. Online, you can also read about a company’s history and make sure they’re a quality company. Most companies offer instant online car insurance quotes thorough their websites which makes obtaining car insurance quotes a lot easier than the traditional method of shopping by phone. Better yet, there are some websites that offer online car insurance quotes from multiple companies with one simple process. You can even purchase your car insurance online if you like the price. One such website is OnlineAutoInsurance.com. There, you can obtain quotes from quality companies such as Progressive, AIG, Infinity, GMAC, Bristol West, and several more. All with one simple process!
Showing posts with label Loan. Show all posts
Showing posts with label Loan. Show all posts
Friday, August 8, 2008
Friday, October 12, 2007
How to Reduce Car Insurance Payments
When it comes to automobile insurance, you can save a significant sum of money by asking the right questions and by taking certain steps.
Step One
Insure all your vehicles with one company to take advantage of multi-car discounts.
Step Two
Ask about multi-line discounts if you are also buying other lines of insurance.
Step Three
Know the value of your vehicles. Drop collision and comprehensive coverage on older vehicles you can afford to replace.
Step Four
Check before changing cars since rates on cars of equal value can vary.
Step Five
Ask about discounts for air bags, anti-theft devices, anti-lock brakes and similar equipment.
Step Six
Ask about discounts for drivers over 40 or 50, if applicable.
Step Seven
Select the highest collision and comprehensive deductibles you can afford.
Step Eight
Buy only coverage you do not already have from some other source such as an auto club.
Step Nine
Make an older, less valuable vehicle the primary transportation for younger drivers in your household.
Step Ten
Make sure younger drivers take driver's education courses.
Step Eleven
Notify your agent if your younger driver makes a "B" average or above in school, and ask about a "Good Student Discount."
Step Twelve
Ask about discounts for being "accident free" over a period of time.
Stay with a company that gives fair, friendly and economical service. Never lie about your driving record to reduce rates. Misrepresentation can invalidate a contract, and your insurance company can refuse to pay a loss.
Step One
Insure all your vehicles with one company to take advantage of multi-car discounts.
Step Two
Ask about multi-line discounts if you are also buying other lines of insurance.
Step Three
Know the value of your vehicles. Drop collision and comprehensive coverage on older vehicles you can afford to replace.
Step Four
Check before changing cars since rates on cars of equal value can vary.
Step Five
Ask about discounts for air bags, anti-theft devices, anti-lock brakes and similar equipment.
Step Six
Ask about discounts for drivers over 40 or 50, if applicable.
Step Seven
Select the highest collision and comprehensive deductibles you can afford.
Step Eight
Buy only coverage you do not already have from some other source such as an auto club.
Step Nine
Make an older, less valuable vehicle the primary transportation for younger drivers in your household.
Step Ten
Make sure younger drivers take driver's education courses.
Step Eleven
Notify your agent if your younger driver makes a "B" average or above in school, and ask about a "Good Student Discount."
Step Twelve
Ask about discounts for being "accident free" over a period of time.
Tips & Warnings
Saturday, October 6, 2007
Get the Best Price and Cheapest Loan
You need the right information and a savvy negotiating strategy to get the lowest price, and cheapest loan, on a new car and truck.
The salesperson hopes you'll go shopping without knowing how much the dealership paid for the car you want, how much other consumers are paying for similar models, whether any discounts are available and how much you should pay for a loan.
Without that you'll wind up paying thousands more than you need to. Almost guaranteed.
That's why our 6 step plan for driving the best deal, can make you a smarter, more confident buyer. Here's how it works:
Step 1. Pick out the car or truck you want to buy.
Talk to friends. Read reviews. (We can help by directing you to the three best choices among many different types of vehicles from subcompacts to pickups.) Get a close-up look at the most promising possibilities close. Take your favorites out for a test drive.
But don't even start negotiating.
You need three things to do your homework:
A copy of the window sticker for the car you want to buy.
The sales tax rate for your purchase.
A list of all the taxable and non-taxable fees you'll have to pay to close the deal.
Step 2. Find out how much the car should cost.
Start at Edmunds.com or Kelley Blue Book to find out what you should pay for the car.
Use information from the window sticker to enter all the information you're asked about engines, accessories and even the color, into their price calculators. When you're done, Edmunds or Kelley will provide you with three prices:
MSRP. This should be very close to the suggested retail price on the sticker. If it is, then you know you've put in all of the right information.
Invoice price. This is the price the dealer paid for the car.
Average transaction price. Edmunds calls this "What Others Are Paying." Kelley refers to it as "The New Car Blue Book Value." It will usually be somewhere between the retail price and invoice price.
Now use our links to see if there are any rebates or low-cost financing available on your car.
Step 3. Line-up a loan.
Our most recent, weekly survey of major lenders shows the average annual interest rate for a:
Five-year loan is 7.72%.
Four-year loan is 7.67%.
Three-year loan is 7.60%.
Unless you have below average credit, there's no reason to pay more than this. Indeed, you should qualify for a lower rate.
Our auto loan comparison charts show lenders offering 60-month loans for as little as 6.25% across most of the country.
Pick a lender offering one of the best rates. You can usually apply on-line and receive a check in a few days.
That rate will almost always be better than the dealer's finance officer can arrange through the lenders he or she works with, unless, of course, you choose a discounted loan from the automaker.
Lining-up a lender before you buy will also protect you from one of auto-buying's most expense mistakes, finance charge markups.
Step 4. Decide which discount to take.
If your have a choice between a rebate and low-cost financing, you need to pick the discount that will save the most money.
Let's say you're going to borrow $18,000 over 60 months and have a choice of two loans: 6.25% from a bank you found on our site or a discount rate of 2.9% from the automaker's finance company, like Ford Credit or GMAC.
If you took the bank loan, your payments would be $350 a month and you'd pay $3,005 in interest over the life of the loan. If you took the discount financing you'd pay $323 a month and $1,358 in interest over the life of the loan.
Now look at the difference between the total costs of the two loans. In our example it's $1,647. If the rebate is more, take the rebate. If not, take the cheap financing, which will have to be arranged through the dealership.
Our low-interest financing calculator allows you to compare any amounts, any rates, quickly and easily.
Step 5. Settle on a price you're willing to pay and make sure you can afford it.
Your goal should be to pay somewhere between the invoice price and the average transaction price. Being a smart consumer should allow you to pay less than the average consumer.
If, for example, the invoice price is $22,000 and the average transaction price is $22,600, then you should set a goal of paying between $22,200 and $22,400, not counting any rebates.
If a rebate's available -- and you decided to take it in Step 4 -- plan on having that amount deducted from the final negotiated price of the car. Don't allow the rebate to enter into your negotiations.
Now you know how much you're going to pay, how much you have for a down payment and how much you're going to finance and what that loan will cost.
The final step is to use our auto loan calculator to get a good idea of what your monthly payments will be. Just enter the price you expect to pay, the loan rate and term, and the tax rate and fees the dealer provided
If you can afford the payments, you're ready to go back showroom.
Step 6. Make an offer.
Former car salesmen and consumer advocates say you'll have the most leverage if you:
Buy at the end of the month when salespeople are trying to make quotas and the dealership is striving to meet its budget for revenue and profits.
Show up an hour before closing on Friday, when everyone is anxious to start the weekend.
Tell the salesperson you're ready to buy today and ask how much he wants for the car.
The salesperson will probably consult with the dealership's sales manager. If he or she comes back with an offer below sticker price, thatâ??s a good sign.
Respond with a counteroffer that's only about $100 above the invoice price. Sometimes the salesperson will resist taking your bid back to the sales manager, saying that it's just too low.
Always remember that your salesperson and the sales manager are professional negotiators, working as a team, to get you to pay as much as possible for their product. They want to see if they can get you to raise your offer without having to make a counteroffer of their own.
Don't budge. Insist the salesperson take your offer to the sales manager.
After you've gone back and forth several times, you should have reached the price you decided to pay back in Step 5.
If the sales manager is willing to accept that, you've got a deal. If not, that's your cue to graciously end the negotiations and try another dealer.
By Mike Sante
Interest.com Managing Editor
The salesperson hopes you'll go shopping without knowing how much the dealership paid for the car you want, how much other consumers are paying for similar models, whether any discounts are available and how much you should pay for a loan.
Without that you'll wind up paying thousands more than you need to. Almost guaranteed.
That's why our 6 step plan for driving the best deal, can make you a smarter, more confident buyer. Here's how it works:
Step 1. Pick out the car or truck you want to buy.
Talk to friends. Read reviews. (We can help by directing you to the three best choices among many different types of vehicles from subcompacts to pickups.) Get a close-up look at the most promising possibilities close. Take your favorites out for a test drive.
But don't even start negotiating.
You need three things to do your homework:
A copy of the window sticker for the car you want to buy.
The sales tax rate for your purchase.
A list of all the taxable and non-taxable fees you'll have to pay to close the deal.
Step 2. Find out how much the car should cost.
Start at Edmunds.com or Kelley Blue Book to find out what you should pay for the car.
Use information from the window sticker to enter all the information you're asked about engines, accessories and even the color, into their price calculators. When you're done, Edmunds or Kelley will provide you with three prices:
MSRP. This should be very close to the suggested retail price on the sticker. If it is, then you know you've put in all of the right information.
Invoice price. This is the price the dealer paid for the car.
Average transaction price. Edmunds calls this "What Others Are Paying." Kelley refers to it as "The New Car Blue Book Value." It will usually be somewhere between the retail price and invoice price.
Now use our links to see if there are any rebates or low-cost financing available on your car.
Step 3. Line-up a loan.
Our most recent, weekly survey of major lenders shows the average annual interest rate for a:
Five-year loan is 7.72%.
Four-year loan is 7.67%.
Three-year loan is 7.60%.
Unless you have below average credit, there's no reason to pay more than this. Indeed, you should qualify for a lower rate.
Our auto loan comparison charts show lenders offering 60-month loans for as little as 6.25% across most of the country.
Pick a lender offering one of the best rates. You can usually apply on-line and receive a check in a few days.
That rate will almost always be better than the dealer's finance officer can arrange through the lenders he or she works with, unless, of course, you choose a discounted loan from the automaker.
Lining-up a lender before you buy will also protect you from one of auto-buying's most expense mistakes, finance charge markups.
Step 4. Decide which discount to take.
If your have a choice between a rebate and low-cost financing, you need to pick the discount that will save the most money.
Let's say you're going to borrow $18,000 over 60 months and have a choice of two loans: 6.25% from a bank you found on our site or a discount rate of 2.9% from the automaker's finance company, like Ford Credit or GMAC.
If you took the bank loan, your payments would be $350 a month and you'd pay $3,005 in interest over the life of the loan. If you took the discount financing you'd pay $323 a month and $1,358 in interest over the life of the loan.
Now look at the difference between the total costs of the two loans. In our example it's $1,647. If the rebate is more, take the rebate. If not, take the cheap financing, which will have to be arranged through the dealership.
Our low-interest financing calculator allows you to compare any amounts, any rates, quickly and easily.
Step 5. Settle on a price you're willing to pay and make sure you can afford it.
Your goal should be to pay somewhere between the invoice price and the average transaction price. Being a smart consumer should allow you to pay less than the average consumer.
If, for example, the invoice price is $22,000 and the average transaction price is $22,600, then you should set a goal of paying between $22,200 and $22,400, not counting any rebates.
If a rebate's available -- and you decided to take it in Step 4 -- plan on having that amount deducted from the final negotiated price of the car. Don't allow the rebate to enter into your negotiations.
Now you know how much you're going to pay, how much you have for a down payment and how much you're going to finance and what that loan will cost.
The final step is to use our auto loan calculator to get a good idea of what your monthly payments will be. Just enter the price you expect to pay, the loan rate and term, and the tax rate and fees the dealer provided
If you can afford the payments, you're ready to go back showroom.
Step 6. Make an offer.
Former car salesmen and consumer advocates say you'll have the most leverage if you:
Buy at the end of the month when salespeople are trying to make quotas and the dealership is striving to meet its budget for revenue and profits.
Show up an hour before closing on Friday, when everyone is anxious to start the weekend.
Tell the salesperson you're ready to buy today and ask how much he wants for the car.
The salesperson will probably consult with the dealership's sales manager. If he or she comes back with an offer below sticker price, thatâ??s a good sign.
Respond with a counteroffer that's only about $100 above the invoice price. Sometimes the salesperson will resist taking your bid back to the sales manager, saying that it's just too low.
Always remember that your salesperson and the sales manager are professional negotiators, working as a team, to get you to pay as much as possible for their product. They want to see if they can get you to raise your offer without having to make a counteroffer of their own.
Don't budge. Insist the salesperson take your offer to the sales manager.
After you've gone back and forth several times, you should have reached the price you decided to pay back in Step 5.
If the sales manager is willing to accept that, you've got a deal. If not, that's your cue to graciously end the negotiations and try another dealer.
By Mike Sante
Interest.com Managing Editor
Know How Much It's Worth Before You Buy
We suggest you to use information from the window sticker to put all the specifics about the engine, accessories and even the color, into their calculators. After that follow with three prices:
- MSRP. This should be very close to the suggested retail price on the sticker. If it is, then you know you've put in all of the right information.
- Invoice price. This is the price the dealer paid for the car.
- Average transaction price. Sometimes we call this "What Others Are Paying." or "The New Car Blue Book Value." It will usually be somewhere between the retail price and invoice price.
How to Buy a Great Used Car
Buying used can be a great deal if you play it smart.
Most three- or four-year old cars and trucks can be surprisingly reliable because automakers have done so much to improve the durability of every model.
They cost a lot less, too -- an average of $14,925, or just a little more than half as much as the typical new vehicle.
But buying used can be an expensive and tragic game of rush-in roulette if you're too hasty.
You don't want to overpay, get a vehicle that's been abused, crashed or dunked in a flood, dried out and shipped off to be sold to the gullible.
Let our 10 smart moves increase the chances your "new" used vehicle will be a great purchase:
Smart Move 1. Although the reliability of all vehicles has improved over the last decade, some are better than others. Take the time to check out the model you are considering.
Two sources of reliability information are Consumer Reports magazine's April auto issue, available in the library or through the Consumer Reports Web site, and J.D. Power and Associates, an independent research company that polls buyers about their cars and trucks.
Think twice before buying a model that has significantly more problems than average, especially if major mechanical components such as the engine or transmission are prone to breakdowns.
Smart Move 2. Insist on taking the vehicle to an independent mechanic for an examination, something any reputable seller should allow. If the seller refuses, walk away.
Make sure the mechanic examining the vehicle is familiar with the brand and has some kind of certification of expertise from a group such as the National Institute for Automotive Service Excellence or ASE. This checkup could cost $100 to $200 (get the price first), but that's cheap compared to finding out too late about serious problems.
Smart Move 3. Check the history of the vehicle through a service such as Experian's AutoCheck or Carfax. For about $20 you can use the vehicle identification number (VIN) to see in which state the vehicle was purchased and whether it has been registered in other states. Such checks are not perfect but they may alert you if the vehicle was in a serious crash or other mishap such as a flood.
If you are buying from a dealer, insist that the dealer provide you with such a report for free and carefully compare the VIN number on the vehicle with that on the report to make sure they are the same.
Smart Move 4. If saving money is your priority, then you should try to buy from an individual rather than a new car dealer.
When you've found one you like, use Edmunds.com or Kelley Blue Book to find out how much it's worth.
Their calculators will ask for lots of information about the car or truck, from the make and model to its mileage and optional equipment. In the end you'll be given three values. The lowest is what the car would be worth as a trade in, or being sold by an individual, or by a new-car dealer.
The "private party" price is always lower than the dealer price because there's more risk. You won't get a warranty (unless some of the original factory warranty remains) and some naughty people sell cosmetically reconditioned wrecks to bargain hunters just like you.
Smart Move 5. If reliability is most important to you, and you are willing to pay extra for the peace of mind it provides, go to a new-car dealer and buy a certified used vehicle.
Certified vehicles are supposed to undergo rigorous inspection and testing by dealership mechanics before being resold. They typically have fewer miles and cosmetic problems too, and come with some type of warranty, though such agreements can vary considerably.
But that will raise the purchase price by an average of $1,680, according to J.D. Power and Associates.
Smart move 6. Check for a warranty. The Federal Trade Commission requires dealers to place a "Buyer's Guide" on the vehicle that tells whether the vehicle has a warranty and what that warranty covers.
If there' no warranty, the "Buyer's Guide" must be marked "as is." That means you take your chances.
Get any promises in writing. Verbal promises don't carry any weight in a dispute. Pull out paper and pencil anytime a salesperson says, "We'll fix anything that goes wrong."
Some newer vehicles may have part of the original manufacturer's warranty in effect. This will be particularly true when '07 models begin to be resold because several automakers began offering longer warranties this model year.
Just remember, parts of that warranty could be voided if the previous owner didn't do all the proper maintenance, so pay attention to the next recommendation.
Smart move 7. Ask the dealer or private owners for service records. Ask the dealer if the original owner bought the vehicle at the dealership. Then, ask if the owner had it serviced at the dealership. If the answer is yes, ask for the service records.
If the dealer balks claiming there is a privacy issue, ask him or her to contact the previous owner and get permission, or to simply cross out the previous owner's name and address before showing the records to you. If the dealer refuses or a private owner says he doesn't have the records, go elsewhere.
Smart move 8. Don't rush into a deal. You do not have three days to return a vehicle and get your money back. That's a common misperception. To see if your state gives you any special rights as a used-car buyer go to state attorney general's web site and check under consumer protection.
Smart move 9. If you're buying from a new-car dealership, check its reputation with the Better Business Bureau and your state's attorney general. Ask friends and family if they know anybody who has had a good -- or bad -- experience.
Be particularly wary of independent used-car lots. It's even more important to verify their reputation before you buy.
Smart move 10. Safety is important. Favor cars and trucks that offer such lifesaving features as anti-lock brakes, side-curtain air bags and electronic stability control, which automatically tries to correct for a skid.
Also, check out how well the vehicle did in crash tests. The most demanding tests available to the public are done by the Insurance Institute for Highway Safety. Think twice before buying a model that scored poorly on two or more of the institute's tests.
Dealers that sell and service the brand of vehicle you're considering can use the vehicle identification number to determine if your car or truck has ever been recalled for a safety defect, and if it the repairs were made.
This isn't a deal breaker. Automakers must fix safety problems for free, no matter who owns the vehicle or how long ago the recall was issued. But you should know what repairs are needed, and be prepared to get them done, before you buy.
By Chris and Cheryl Jensen
Interest.com Contributing Editors
Most three- or four-year old cars and trucks can be surprisingly reliable because automakers have done so much to improve the durability of every model.
They cost a lot less, too -- an average of $14,925, or just a little more than half as much as the typical new vehicle.
But buying used can be an expensive and tragic game of rush-in roulette if you're too hasty.
You don't want to overpay, get a vehicle that's been abused, crashed or dunked in a flood, dried out and shipped off to be sold to the gullible.
Let our 10 smart moves increase the chances your "new" used vehicle will be a great purchase:
Smart Move 1. Although the reliability of all vehicles has improved over the last decade, some are better than others. Take the time to check out the model you are considering.
Two sources of reliability information are Consumer Reports magazine's April auto issue, available in the library or through the Consumer Reports Web site, and J.D. Power and Associates, an independent research company that polls buyers about their cars and trucks.
Think twice before buying a model that has significantly more problems than average, especially if major mechanical components such as the engine or transmission are prone to breakdowns.
Smart Move 2. Insist on taking the vehicle to an independent mechanic for an examination, something any reputable seller should allow. If the seller refuses, walk away.
Make sure the mechanic examining the vehicle is familiar with the brand and has some kind of certification of expertise from a group such as the National Institute for Automotive Service Excellence or ASE. This checkup could cost $100 to $200 (get the price first), but that's cheap compared to finding out too late about serious problems.
Smart Move 3. Check the history of the vehicle through a service such as Experian's AutoCheck or Carfax. For about $20 you can use the vehicle identification number (VIN) to see in which state the vehicle was purchased and whether it has been registered in other states. Such checks are not perfect but they may alert you if the vehicle was in a serious crash or other mishap such as a flood.
If you are buying from a dealer, insist that the dealer provide you with such a report for free and carefully compare the VIN number on the vehicle with that on the report to make sure they are the same.
Smart Move 4. If saving money is your priority, then you should try to buy from an individual rather than a new car dealer.
When you've found one you like, use Edmunds.com or Kelley Blue Book to find out how much it's worth.
Their calculators will ask for lots of information about the car or truck, from the make and model to its mileage and optional equipment. In the end you'll be given three values. The lowest is what the car would be worth as a trade in, or being sold by an individual, or by a new-car dealer.
The "private party" price is always lower than the dealer price because there's more risk. You won't get a warranty (unless some of the original factory warranty remains) and some naughty people sell cosmetically reconditioned wrecks to bargain hunters just like you.
Smart Move 5. If reliability is most important to you, and you are willing to pay extra for the peace of mind it provides, go to a new-car dealer and buy a certified used vehicle.
Certified vehicles are supposed to undergo rigorous inspection and testing by dealership mechanics before being resold. They typically have fewer miles and cosmetic problems too, and come with some type of warranty, though such agreements can vary considerably.
But that will raise the purchase price by an average of $1,680, according to J.D. Power and Associates.
Smart move 6. Check for a warranty. The Federal Trade Commission requires dealers to place a "Buyer's Guide" on the vehicle that tells whether the vehicle has a warranty and what that warranty covers.
If there' no warranty, the "Buyer's Guide" must be marked "as is." That means you take your chances.
Get any promises in writing. Verbal promises don't carry any weight in a dispute. Pull out paper and pencil anytime a salesperson says, "We'll fix anything that goes wrong."
Some newer vehicles may have part of the original manufacturer's warranty in effect. This will be particularly true when '07 models begin to be resold because several automakers began offering longer warranties this model year.
Just remember, parts of that warranty could be voided if the previous owner didn't do all the proper maintenance, so pay attention to the next recommendation.
Smart move 7. Ask the dealer or private owners for service records. Ask the dealer if the original owner bought the vehicle at the dealership. Then, ask if the owner had it serviced at the dealership. If the answer is yes, ask for the service records.
If the dealer balks claiming there is a privacy issue, ask him or her to contact the previous owner and get permission, or to simply cross out the previous owner's name and address before showing the records to you. If the dealer refuses or a private owner says he doesn't have the records, go elsewhere.
Smart move 8. Don't rush into a deal. You do not have three days to return a vehicle and get your money back. That's a common misperception. To see if your state gives you any special rights as a used-car buyer go to state attorney general's web site and check under consumer protection.
Smart move 9. If you're buying from a new-car dealership, check its reputation with the Better Business Bureau and your state's attorney general. Ask friends and family if they know anybody who has had a good -- or bad -- experience.
Be particularly wary of independent used-car lots. It's even more important to verify their reputation before you buy.
Smart move 10. Safety is important. Favor cars and trucks that offer such lifesaving features as anti-lock brakes, side-curtain air bags and electronic stability control, which automatically tries to correct for a skid.
Also, check out how well the vehicle did in crash tests. The most demanding tests available to the public are done by the Insurance Institute for Highway Safety. Think twice before buying a model that scored poorly on two or more of the institute's tests.
Dealers that sell and service the brand of vehicle you're considering can use the vehicle identification number to determine if your car or truck has ever been recalled for a safety defect, and if it the repairs were made.
This isn't a deal breaker. Automakers must fix safety problems for free, no matter who owns the vehicle or how long ago the recall was issued. But you should know what repairs are needed, and be prepared to get them done, before you buy.
By Chris and Cheryl Jensen
Interest.com Contributing Editors
Saturday, February 10, 2007
Q : How to Approve For a Poor Credit Car Finance Loan?
Add Up Your Current Debts
Make a Down Payment
If you have bad credit, lenders are going to want to make sure that, even if you don’t pay your loan, they can resale the car and get their money back. For this reason, it’s important that you take out a loan for less than the car’s appraised amount.
For example, if the car you’re buying is worth $15,000, you’ll want to borrow less than that amount. Usually that means making a significant down payment. Making a down payment makes you less of a risk to a borrower, therefore improving your chances of being approved.
The amount of money you pay each year toward debts shouldn’t exceed 30% of your annual income. This includes your car payment. Before applying for an auto loan, add up the total amount you pay toward your debts each year, including the amount you plan to pay on your car. If this amount exceeds 30% of your annual income, you’ll need to take measures to lower your debt-to-income ratio. This means that you’ll either have to pay off some debts before applying for a car loan, or you’ll have to reduce the amount you’ll borrow.
Clean Up Your Credit Before Applying
Obtain copies of your credit reports from the three main reporting agencies. Check each report for errors or inaccuracies. Keep in mind that it takes these companies up to 30 days to follow through on disputes. Make timely payments on your other credit accounts in the months prior to applying. Even a few months of timely payments will improve your chances of approval. Finally, avoid applying for other forms of credit. Inquiries on your credit report temporarily lower your credit score.
Make a Down Payment
If you have bad credit, lenders are going to want to make sure that, even if you don’t pay your loan, they can resale the car and get their money back. For this reason, it’s important that you take out a loan for less than the car’s appraised amount.
For example, if the car you’re buying is worth $15,000, you’ll want to borrow less than that amount. Usually that means making a significant down payment. Making a down payment makes you less of a risk to a borrower, therefore improving your chances of being approved.
Saturday, January 20, 2007
Q : What is car insurance?
A : Car insurance is insurance consumers can purchase for cars, trucks, and other vehicles. Its primary use is to provide protection against losses incurred as a result of traffic accidents. An insurance company may declare a vehicle totally destroyed ('totaled' or 'a write-off') if it appears replacement would be cheaper than repair. Recommend that car owner should make a car insurance because we do not know the future when the accident will happen.
Insurance can cover some or all of the following items:
- The insured party
- The insured vehicle
- Third parties
Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently.
Saturday, January 13, 2007
Q : What is Annual Percentage Rate (APR)?
A : Often confused with interest rate, an APR supplies the cost of credit over the course of a year. It is supplied as a percentage taking into consideration the amount finance, any charges, and the term of the loan.
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