Bad credit car loans are easier to get than ever before, thanks to the growing subprime loan market. Almost half of all car loans today are bad credit loans, in that they are made to borrowers with FICO scores below 620.
Bad Credit Buyers Beware
Bad credit car loans come with slightly higher interest rates, which mean higher profits for car dealers and unwary buyers may wind up spending more than they have to. NADA Chairman Charley Smith admits, We recognize that many consumers may not know that the interest rate may be negotiable or that the dealer may be compensated for obtaining financing.
This is one reason many experts recommend that car buyers use direct financing. This means getting a car loan directly from the lender instead of through the dealer. Not only can they find more competitive rates on bad credit car loans, they can avoid the hassle of going through a dealers high-pressure finance office.
The difference between the interest rate on new or used car loans does not vary that much because used vehicles dont depreciate as quickly as newer models. This makes them better short-term collateral for lenders. The average used car costs less than half of what the average new car does. Thats why they outsell new cars three-to-one. However, choosing a new car gives the buyer more control over optional features, plus a warranty that lasts for years.
Hispanic Car Buyers
Some of the shoppers looking for bad credit car loans are Hispanic. The term loosely refers to all Spanish-speakers. Most Hispanics in the U.S. are descended from immigrants from Mexico and Central America. Our Hispanic population now stands at 41.3 million and is growing three times faster than the general population. Hispanics will number 47.7 million by 2010, and 60.4 million by 2020.
Hispanic buying power is growing at an annual compound rate of 8.2%, nearly twice the rate for non-Hispanics. It is projected to reach $1 trillion annually by 2010. A recent survey by The Media Audit reveals the following interesting facts when it comes to car buying:
Of the 26.1 million Americans planning to buy a vehicle this year, 4.7 million are Hispanic. Of this number, 1.9 million are planning to buy a new car.
While 29.5 percent of all adults surveyed have car loans, just 27.3 percent of all Hispanics have car loans.
Among the 4.8 million adults who plan to spend $30,000 or more on their next car, 830,000 are Hispanic.
Much of the shopping Hispanics do for cars and loans takes place online. A study conducted by eMarketer projects there will be over 16 million Hispanic Internet users in the U.S. by 2007. That equals 8.4% of all Internet users. Hispanics go online at home an average of 9.2 hours a week. Seventy percent say the Internet is the best source for comparing the prices on both cars and loans.
Among the growing number of automotive sites aimed at the Hispanic market is Prestamo Automotriz. The entire site is in Spanish. It includes several helpful articles and an application for a free loan quote. While Prestamo Automotriz specializes in bad credit loans, all credit levels are welcome.
Tags: Bad Credit Car Loans, Bad Credit Loans, Borrowers, Car Buyers, Car Costs, Car Loan, Compound Rate, Credit Car, Fico Scores, Finance Office, Hispanic Population, Hispanics, Immigrants, New Cars, Number 47, Optional Features, Spanish Speakers, Subprime Loan Market, Trillion, Unwary BuyersRelated posts
It’s expensive buying a car and it only gets more so as time goes on. Over time, the price of new cars has increased faster than the rate of inflation. This isn’t entirely due to greed on the part of automakers; cars are also more complicated and useful than they used to be. Sure, they were cheaper in the 1960’s, but they didn’t include air conditioning, air bags and video systems. Convenience and safety comes at a price.
With the increase in price comes an increase in the length of time people are taking to pay off their cars. Few people pay cash; most people take out loans and pay over time. The average car loan, which used to be repaid over a period of three years, now averages about six years in duration. That’s a long time to pay for a car, especially if you have no plans to own it for that long.
Taking six years to pay for a car has its advantages, as the payments are lower than they would be over a shorter loan term. Such a long loan does have a significant disadvantage, though – you can find yourself in a negative equity, or “upside down”, situation. This can be a serious problem – if you should total the car in an accident, your insurance company will only pay you the value of the car, and not the amount you still owe.
A buyer is described as being upside down when he or she owes more on a car loan than the car is worth. It’s easy to find yourself in an upside situation, and it can occur under any of the following circumstances:
Insufficient down payment – Cars depreciate as much as 25% the minute you drive them off of the lot. If you haven’t provided enough of a down payment to cover that depreciation, you may find yourself upside down immediately.
Trading in too often – Buyers like to trade cars in and roll their outstanding balance into a new loan. These unpaid debts can contribute to negative equity.
Too long a loan – Five and six year loans often lead to negative equity. You can often avoid it by keeping the length of loans to three years or less.
In order to avoid a potential problem in the event of an accident, you should contact your insurance provider to make sure that you have “gap insurance.” Gap insurance will make sure that you are protected should you have an accident while in an upside down situation. Without gap insurance, you may find yourself still making car payments even though you no longer have a car. That is the last thing any car owner wants.
Tags: Air Bags, Air Conditioning, Automakers, Car Loan, Circumstances, Convenience, Depreciation, Duration, Greed, Insurance Company, Length Of Time, Loan Term, Loans, Long Time, Negative Equity, New Cars, Rate Of Inflation, Six Years, Unpaid Debts, Video SystemsRelated posts
If you are looking to buy a car but are unsure whether or not a new car is worthwhile, then you should consider the benefits of buying a car with a personal contract purchase loan. Using a personal contract purchase loan can reduce the amount of depreciation you suffer, and help you to get the car you want. Here is some more information about buying a car with a personal contract purchase loan.
What is a PCP?
A PCP, or personal contract purchase loan, is a personal contract for private individuals. It allows you to set a contract term with monthly payments for your new car. At the end of the term you can either purchase the vehicle fully or give it back to the contact provider.
Costs of a PCP
The costs of a PCP depend on the car you are buying, and how much deposit you can afford to put down. It also depends on the length of the contract, as well as other factors like maintenance requirements. However, the length of the agreement will usually last from 24-42 months, during which time you pay a monthly cost as a rental’ of the vehicle.
Guaranteed future value
One advantage of a PCP is that you will get a minimum guaranteed future value agreed, so that you know how much you will have to pay at the end of the loan term to buy the car outright. You can either pay the guaranteed value and own the car, hand it back without any payments, or use the guaranteed value towards another new car.
Cheaper than many other methods
Apart from flexibility, the main advantage of a PCP is that you have fixed monthly payments that are likely to be lower than other forms of auto finance. Also, if you get a PCP with maintenance included you will not have to worry about large repair costs like you might with a used car. Also, depreciation is lower because you have a guaranteed future value.
Losing the car
Perhaps the biggest disadvantage of a PCP is that during the contract term you do not actually own the car. You are simply leasing it from the provider, so if you should fail to make the payments the car can be taken away from you. Before taking out a PCP, make sure you can afford the repayments so that you will be able to keep the car you want.
Cheaper than a loan
Although PCP means you don’t own the car during the contract term, it is much cheaper than a loan for financing a car. Even if you get a very low rate, you will pay back more and the depreciation will be higher. If you are looking to buy a car and you don’t want to pay outright, then go for a PCP.
Tags: Auto Finance, Buy A Car, Buy Car, Car Buying, Car Depreciation, Car Hand, Car Loan, Contract Term, Flexibility, Future Value, Loan Personal, Looking To Buy A Car, Maintenance Requirements, New Car, Pcp, Personal Contract Purchase, Personal Loan, Private Individuals, Provider Costs, Purchase LoanRelated posts
There are a few things that you should always look for if you are buying a used car. Here are the tips that you will need not to get a lemon.
1. Warranty Facts
You can sometimes get a car that is still under warranty. If this is the case, check with the warranty (perhaps call the number in the warranty book) to ask if there is anything that you need to do to keep the warranty when you buy the car. This often just involves sending out a letter with the purchase information to the dealership.
If you buy from a car dealership, you can often get warranties on used cars. If you want peace of mind when purchasing, consider this option for sure.
2. Warning Signs
If the odometer reading doesnt match the wear and tear of the car, then you should definitely ask for some records.
If there is any vagueness about getting the service records for the car, you might want to walk away.
3. Getting a Good Price
Because the cost of new cars is going up, there is more of a demand for used cars. This means that some dealerships believe that they can take more money than the car is worth. There are a few things that you need to do to get a good price.
Do your research; check online and in used car guides (often available at the local library) to find out what the prices of cars listed online to sell are. If you are uncertain about buying a car online, then dont. Often purchasing a car online means that it will come from a long distance, and as such, you will have to pay exorbitant shipping or delivery costs, which will not be worth the money that you are saving off the sticker price.
4. Making the Payments
Instead of getting a car loan from the dealership and paying the dealer or the seller monthly payments, consider taking out a loan from the bank. You will often get better interest (or financing, as it is called with cars) rates. Go to a bank or credit union before you go shopping for your car. Salespeople will try to talk you into going with the dealerships rates; you will be better off if you already have your financing set up. Credit unions can sometimes offer even better rates than banks on loans and are an often-overlooked choice.
5. The Information to Get
In Ontario, and in some states, you can ask to get the used vehicle information package. This will have the details of the previous maintenance and ownership history of the car.
Always do a complete visual inspection of a car. Even if you are buying a car from the internet, buy one from your province or state so that you can go and check it out first. Alternatively, agree with the seller that you have the right to return the car for a full refund (including shipping) if it does not meet your standards.
6. What not to Trust
Dont judge the use of a car by its brakes; a dealer can buy new brake pads for less than $10, which is often an easy fix for a car.
If a car has rear-door-hinges that are very worn, it might have been used as a taxi, and you should probably find another one. Check the roof of the car to see if there have been any holes filled in; this could have been a sign for a delivery vehicle. They also often have been used a lot.
Be careful if a car looks like it has been freshly painted. This could mean that it has been in an accident that is trying to be covered up.
7. And finally
Buying a used car can be a great deal for you. You can save money on the car itself, and you can get a safe means to travel. Remember, the condition of the car is more important than if it has had multiple owners, or even the odometer reading. Good luck shopping!
Tags: Buying A Used Car, Car Dealership, Car Loan, Car Salespeople, Case Check, Delivery Costs, Exorbitant Shipping, Local Library, Long Distance, New Cars, Odometer, Odometer Reading, Peace Of Mind, Purchasing A Car, Scams, Sticker Price, Vagueness, Warning Signs, Warranties, Wear And TearRelated posts
Salesmen are more willing to haggle prices to close the deal when in the holiday season, as most people are too busy to think about buying a car at that time.
Another time that is the best for getting a good deal is the period from July to October. Dealerships are trying to get rid of their inventory to make way for the new year models.
Do some research online, and get some quotes optimally along with some good rebates or incentives. Print out your results from the lowest quotes and bring it with you to your local dealer. Showing them the lower quotes might compel them to give you a better deal. If not, shop around some more.
Visit FightingChance.com This site has great advice, as well as incentives and rebate offers. You may be able to save thousands of dollars on your car purchase.
A good tactic is to bring a copy of your credit score with you to the dealership. It can lower your interest rates on your car loan.
Be suspicious of any ‘bait and switch’ tactics, such as some odd change that occurred after you initially discussed the car with the dealer. Some unscrupulous dealers will use your preference for a particular car as leverage in convincing you to stay with your choice; although, unfortunately there has been some ‘unforseen’ change in the price or deal you originally discussed. Stick to your guns and remind them that is not what was agreed. If they don’t back down,or at least give you a concession, then it is up to you if you want to accept the difference.
A rule of thumb is to never wait until your car is broken down and you are desperate not only are you not thinking as clearly at a time like that, but the salesman may sense your desperation and take advantage of you. On such a major decision, try to force yourself to take action when you realize your car has issues, but while it is still running.
Do your research before going in and subjecting yourself to high-pressure tactics. Don’t fall for any deals where you are required to make an on the spot decision. This is a big commitment and you need to be on top of the game.
Tags: Bait And Switch, Car Buying Tips, Car Loan, Car Purchase, Concession, Credit Score, Desperation, Holiday Season, Incentives, Lemon Law, Leverage, New Year, Pressure Tactics, Rebates, Rule Of Thumb, Salesmen, Switch Tactics, Tactic, Thousands Of Dollars, Unscrupulous DealersRelated posts
Cars loans do not require any preface; they are widely popular in the financial market and especially among those who cannot afford cars directly from their own. Cars are the easiest way to commute from one destination to another but not every one is capable enough to purchase a car. Hence, car loans may be a good alternative for you when you urgently require car for your various household usages.
Car loans may be secured or unsecured; you can opt for any one of these depending upon your financial capabilities and circumstances. Secured car loan suits those people who possess a property and wish to offer it as collateral. Presence of property minimizes the risk of lender and he is comfortable to offer low interest rate. You get all the benefits in secured car loan such as long period of repayment, small and affordable monthly instalments and flexible terms and conditions. However, the only thing you have to take care of is to make regular monthly instalments to avoid repossession of property in case you fail to repay the amount.
While unsecured car loan does not have any risk of losing your property because it requires no collateral from the borrower. However, you are burdened with heavy monthly charges with short repayment time and heavy interest rate.
However, buying a car is a big time investment hence, before you shop around for your dream vehicle it is for your benefit if you take into consideration your budget and other financial issues. A fierce competition among lenders may help you get the best car loan deal. You can explore the market on the Internet and approach lenders directly online.
Tags: Best Car, Big Time, Car Cars, Car Loan, Car Loans, Circumstances, Collateral, Dream Vehicle, Easy Loans, Financial Capabilities, Flexible Terms, Household Loans, Instalments, Interest Rate, Lenders, Loan Deal, Preface, Repossession, Suits, Time InvestmentRelated posts
Car loans are more common than ever. Most people are learning that they can get into the car that they want much easier and much more quickly if they have a loan than if they wait until they have saved enough. The fact of the matter is that cars are expensive, even those that are not all that fancy. If you want a car that will last and will get you from point A to point B safely you’ll need to invest in it. And a simple way to do this is with a car loan.
Applying For a Car Loan
Applying for your first car loan is a little bit unnerving because you aren’t quite sure what you are getting into. The process is actually quite simple and depending on your credit, your lender, and your car dealership you could be driving home in your new set of wheels the same day as you fill out an application! Sound too good to be true? The whole point of car loans is that they make it simple for people to get a new car without actually having the cash on hand.
When you apply for a car loan you will first need to know what sort of car you would like to buy. Most lenders need to know the make and model of the car that you are looking at so they can verify that it is a car worthy of their financial support. In addition to providing the lender with this information you will need to supply your personal information such as your full name, your mailing address, your financial information, your date of birth, and your social security or tax payer identification number. When the lender has all of this information they run a credit check. They look to see how responsible you have been with credit in the past.
If you have had credit challenges in the past, there is no need to worry. There are many lenders out there who deal with those that have less than perfect credit. Regardless of your credit, you will usually hear back from the lender within an hour or so and they will let you know how much they are willing to finance, how much of a down payment you need if any, and what the terms of your loan are. The terms refer to how long you have to pay off the loan and what your interest rate is. Once you sign the paperwork and verify that you have automobile insurance you are free to drive your vehicle home.
With a car loan you will generally need to make one monthly payment. This not only pays on the amount that you have had to borrow to buy the car, but also the interest on the loan. While the idea of paying on a car loan is not something that people look forward to, it is a lot easier to come up with the money for a monthly payment than it is to save up for the car! Car loans really do make it simple for the average consumer to get that new car.
Tags: Buying Car, Car Buying, Car Dealership, Car Loan, Car Loans, Cars, Credit Challenges, Credit Check, Date Of Birth, Fact Of The Matter, Financial Information, First Car, Lenders, Little Bit, Model Car, New Car, People, Set Of Wheels, Social Security, Tax Payer Identification NumberRelated posts
Instant Car Loans Making The Car Buying Process Simple
Because of instant approval car loans, many people are enjoying a hassle-free car buying experience. Purchasing a new or used vehicle is a time of excitement and frustration. Pushy salesmen and dealerships have a habit of taking advantage of unsuspecting buyers. Additionally, the temptation to buy more than you can afford is a common problem. However, securing financing before entering a dealership showroom is a great way to take the hassle out of buying a car
Understanding Instant Car Loan Basics
New car buyers and those unfamiliar with car buying tactics may pay sticker price for a vehicle and accept dealership financing without shopping around. Unfortunately, dealerships prey on buyers of this sort. Prior to buying a car, it is essential to shop around and compare offers from various lenders. To avoid a dealership scam, you may consider getting approved for an auto loan before beginning your search.
The internet is loaded with auto loan lenders offering instant approval loans. With instant approvals, you receive a response immediately. The applications are easy to understand. Simply input basic information such as income, employer, desire amount, etc. Instant approvals work two ways. The lender may either approve a stated loan amount, or determine an affordable loan amount based on your income and debts.
How to Find a Lender that Offers Instant Approvals
Various online auto lenders offer instant approvals. However, if you are hoping to compare several instant approval offers, use an auto loan broker. This is the easiest and simplest way to shop around for the best auto loan offer. Brokers are recognized for supplying multiple offers. Savvy shoppers know the benefits of this feature.
By obtaining multiple offers, you are able to compare auto loan rates, terms, and services. Choosing the loan offer with the lowest rate will lower your car payment. Even if the dealership offers you a finance package, before accepting their offer, complete an online quote request. Dealerships tend to adjust auto loan rates to benefit their bottom line.
Completing the Car Loan Paperwork
After receiving the instant approval quotes, the next step involves choosing the auto loan lender with the best offer. If using a broker, you are obligated to complete an official loan application with the lender. Upon approval, the lender will deliver a check to you. Once you decide on a car, and negotiate a sales price, you simply sign the check over to the dealership, which completes the transaction.
Tags: Auto Lenders, Auto Loan Lenders, Auto Loan Rates, Best Auto, Car Buyers, Car Loan, Car Payment, Free Car, Frustration, Hassle, Instant Approval Loans, Instant Approvals, Instant Car Loans, Loan Basics, Loan Broker, Salesmen, Savvy Shoppers, Sticker Price, Two Ways, Unsuspecting BuyersRelated posts
When we purchase a car we need some sort of car or auto insurance. Most of us want to buy it as cheap as possible. The quality of the insurance product means a lot though; it is important that the policy has a good coverage and it is also important with a good service from the insurance company, especially if and when an accident occurs. Auto insurance is one of those items where the price can vary a lot based on which insurer you go through. Sometimes your rates can vary as much as 20-30% just because of different rating factors the company may use. By utilizing the power of the Internet you can be a savvy insurance shopper and find cheap auto insurance that fits your needs while providing the customer service and support you need.
When people are shopping for a new or used car they often don’t think about insurance until the last moment. Several consumers fall into the trap of obtaining an instant car loan through the dealership and inadvertently signing up for the auto insurance through the finance company. This can be one of the worst mistakes you can make. Often finance companies that roll insurance into the finance agreement will charge premium prices that have interest charges added in on top of the already high rates. When obtaining financing make sure you state up front that you will be getting insurance through a company of your choosing and not the finance company.
The best bet to finding the best deal on vehicle coverage is to do your research before you buy the car. By knowing up-front what type of car you are looking for most insurance companies can provide you with a basic quote that is in the ballpark of the rates you can expect to pay. Remember, never drive off the lot with any car until you have the insurance purchased and finalized. Accidents can happen anywhere at any time. The last thing you want to happen is to be in an accident without insurance.
Tags: Accident Without Insurance, Accidents, Best Bet, Car Insurance, Car Loan, Cheap Auto Insurance, Finance Agreement, Finance Company, Getting Insurance, Insurance Companies, Insurance Company, Insurance Product, Insurance Shopper, Insurer, Interest Charges, Last Moment, Premium Prices, That Fits Your Needs, Vehicle Coverage, Worst MistakesRelated posts
Buying a new car is a major purchase with major amounts of money leaving your pocket. Ask an honest car salesman and he will tell you that he is trying to get his potential customers to buy something they dont really need. Ask a dishonest salesman and he wont tell you why. That about sums it up plus it opens the door for all kinds of scam artists to try to use tricks to get you to buy a new car. Arm yourself with all the information you can when buying a new car. Here are some tips:
There are some classic scams that car salespeople use to get you to sign the dotted line on a sales contract. Get on the internet and see what these scams are. Car salespeople are probably the most persuasive type of salesmen/women (most tend to be men) that you will come across. It is very tempting to give into their hype.
Dont be afraid to say No.
If there is ONE thing you dont like about a car dont buy it. That one thing will bug you down the road as you make those expensive car payments and the honeymoon has worn off. Often, people find the need to purchase another car than keep mending the current one, because of their poor decision making when purchasing the existing one.
Dont give the salesperson a feel for what you like and dont like. Dont get too personal with the salesperson. Scam and con artists are skilled at getting into you head and detecting something you have an emotional or preference stake in. Keep focused on buying a car and try to avoid the small talk with the salesperson.
How much is that car really going to cost you in terms of maintenance, insurance, and fuel? There are web sites where you can get this information. Another bit of knowledge to arm yourself with is knowing how much that car loan is going to cost you in terms of interest.
Check your credit report and correct any errors that may be there. It will help to get your loan approved faster.
Read reviews on various cars and educate yourself before going to the car lot. The internet has a wealth of information resources for buying new cars.
Today, there are many places where you can purchase a car. There are classifieds in your local newspapers, local car dealerships, car magazines, the internet, with a huge array of sites, also offers many great deals. Ebay is also an increasingly popular destination to find cars and not necessarily just to from it. Ebay can also be used for researching the car you are looking to buy. You can use it to gain an idea of how much cars in general go for based on your specifications and conditions. There are many, many new listings every hour that you can browse through to help find your new car.
Tags: Buying A New Car, Car Loan, Car Lot, Car Payments, Car Salesman, Car Salespeople, Con Artists, Decision Making, Dotted Line, Expensive Car, Honeymoon, Hype, Maintenance Insurance, Poor Decision, Sales Contract, Salesmen, Salesperson, Scam Artists, Scams, Stake