Auto
Refinance Tips:Here are some auto refinance tips that will
save you money. Remember, the more educated you become as you search for an auto
refinance loan, the less likely you are to fall prey to an scam artist.
The
dishonest car dealer.
Unfortunately, this is common practice
a way too many auto dealers. A friend of this website relates the story of
applying for an auto refinance loan at a new car dealership. Jane (not her real name) is
extremely particular about her credit report. She has the highest credit score
that we know of (over 810). When purchasing a new car recently that was
advertised with 0% financing, she negotiated the purchase price, and filled out the auto
loan application for dealer financing at 0% APR. After a few minutes of being in
the finance manager's office, her salesman returns with the finance manager.
Neither was smiling and each man had a serious look on his face. The salesman
informed Jane that she didn't qualify for the 0%APR auto loan, but that they
could offer her an auto loan at 11.9%. She asked why she didn't qualify for the
no interest loan. The finance manager stated that her credit score was less than
600 and produced a "report" that showed her credit score at 590. She immediately
showed both men a copy of her credit report from all three bureaus.
The finance manager just walked away, without saying a word. The
salesman tried to get Jane to believe the lie that the credit bureaus report a
higher number to the public, and report the genuine number to lenders. Jane
laughed and left. The moral of the story is to be informed and beware. Know your
credit score before you apply for an auto refinance loan from any source.
Know your budget.
Experts say you shouldn't spend more than 10 percent of your gross income on car
expenses, which includes the cost of the car along with insurance, maintenance,
and gas. Our recommendation is to spend no more than 5% of your income on
car expenses, including your auto loan payments, insurance, gas, maintenance,
and other associated expenditures. In recent years lenders have lengthened the life
of the typical auto loan, making the payments smaller. The average consumer,
however, simply spent more on her new car. We know of people whose auto loan
payments alone comprise 30% of their gross income. This is not financially
prudent. Automobiles are depreciating assets.
Keep the auto price separate from the auto loan.
Always negotiate the car's price separate from the auto loan terms. Dealers like
to combine the two into one negotiation package because they can hide the fact
that you are over-paying for either the car, the auto loan terms, or both.
Salesmen at dealerships like to get you to focus on a monthly payment
number that you can afford, then try to build in as much profit for themselves within
that number. If you keep the negotiation for the price of the car and the terms
of the auto loan separate, you'll be able to easily tell if you are getting the
best deal on each.
What
is auto refinancing? How can I benefit by refinancing my auto loan?
While most people regularly consider refinancing their home mortgage, they never
think of refinancing their auto loan. Refinancing your auto loan is very similar
to refinancing your home. When you refinance your auto loan, you simply pay off
your current balance with an auto refinance loan from a lender with a lower
interest rate. The two basic choices to refinance your auto loan are
lowering your payments or paying off your auto loan sooner. You can also choose
a combination of each.
There are some genuine savings to be
had when you refinance your auto loan, especially if you've been put into a high
interest rate auto loan by the dealer. For instance, suppose you borrow
$20,000 for a new car purchase and you finance it with a dealer arranged auto loan at
19% interest for a period of 6 years. Your monthly payment will be $467.53 and
the total amount of interest paid over the life of the loan will be $13,662.48.
That is just interest on your auto loan! If you refinance for a period of 5
years at 6% interest rate, your auto loan payments would drop by over $80.00 per
month, you'd pay off your auto loan one year sooner, and save over $10,000.00 in
interest costs over the life of the loan. That's right, the total interest cost
for the auto refinance loan with a 6% interest rate is $3,199.36. We have a friend who
works at a dealership. He states that the dealer makes more money arranging an
auto loan than he does on selling the car. Looking at the above example, you can
see why.
Some general guidelines to refinance your auto loan:
* Your auto refinance loan amount must not be more than your vehicle is worth. Just as
your bank will not lend you more than your house is worth for your home
mortgage, your auto loan company will not refinance more than your vehicle is worth.
* Have your necessary information ready before you apply for an auto refinance
;oan. This
includes the year and model of your car, as well as the vehicle identification
number.
* You will likely be declined for an auto refinance
request if the information you enter doesn't match exactly the information on
your current auto loan. This includes the same name(s) with the exact same
spelling, as well as the account number.
However, their specialty is not a bad credit auto loan per se; but they do work
with people with less than perfect credit.
The
goal of our website is to help you get the BAD CREDIT LOAN that you need now and to be the number one resource you use to improve
your credit and obtain financing even when your credit is less than
perfect. We are here to help!
