All posts in Auto Financing

Auto Financing: 4 Plans to Help You Get into a Car Fast

auto financing

Before making the commitment to a car loan, take time to plan a few important steps. To get into a car quick and painlessly, it helps to maximize creditworthiness, budget accordingly, realistically consider your income, and obtain a preapproval.

Maximize Your Creditworthiness

To have the most auto financing options, check your credit beforehand. Knowing your score helps you know what to expect ahead of time. Also, it gives you the opportunity to improve your score. Always look for errors on your report. If account balances are inaccurately reported or if $0 balance on accounts are not reflected, you may find yourself paying more in interest or being denied. Pay particular attention to previous auto loan reporting. If possible, pay down credit cards or pay them off completely. Credit scores are sensitive to the percentage of your total available credit you have used. The lower the better.

Budget Accordingly

Before stepping onto a car lot, know what you can afford. Often, people make the mistake of just figuring the maximum they can squeeze out of their monthly income, but this leaves them at a disadvantage. It is important to only spend as much as you can comfortably afford, while still having enough room in your budget to meet other financial goals. Prior to purchasing a vehicle, make sure you have budgeted for other vehicle-related expenses, including insurance, gas, maintenance, and repairs. These amounts differ substantially with different vehicles, so the monthly payment should never be your only consideration.

Consider Your Income

A good rule of thumb is to spend no more than 10 percent of your after-tax income on a car payment. For example, if your take home pay is $2,500 per month, than a car payment of $250 or under keeps you in good financial shape. Some companies, like Bay Ridge Nissan, know that you also have to add insurance, gas, maintenance, and repairs to this figure. When you calculate the total costs, it usually becomes clear why the 10 percent rule makes sense.

Get Pre-Approved

This not only saves you time at the dealership, it saves you money as well. Pre-approval prevents you from having to make a quick financing decision. You can take the time to consider multiple options. They also give you negotiating leverage. From the dealership’s standpoint, you are not only a sure thing, but you can keep the negotiation focused on the price of the car instead of the monthly payment.

Armed with your preapproval and prepared with a budget, getting into a car fast is no problem. The balance of the negotiation is on your side when you know what you want to pay and stay within your parameters.

4 Questions To Ask Before You Finance Your Car

It isn’t uncommon for car buyers to ask a lender to finance their purchase. It is rare to have $10,000 or more in available cash, and it may be possible for those with good credit to pay nothing or almost nothing to borrow the money. What are some questions that you should ask before deciding to finance a vehicle purchase?

Is There a Prepayment Penalty?

The first question that you need to ask is if there is a prepayment penalty associated with the loan. If there is, you may not be able to trade or sell your car before the loan has been fully paid or even refinance if better terms become available. For borrowers with good credit getting financed through a national or regional lender, this is generally not an issue.

How Much Interest Do I Pay Throughout the Loan?

Your monthly payment does not accurately reflect how much you actually pay for the car. Instead, you want to know how much interest you will pay over the course of the loan. The longer your loan term, the more you pay because at least a portion of each payment you make includes interest paid to the lender.

How Do I Get Matched With a Lender?

Another good question that you should ask is how you are matched with your lender. In many cases, Markosian Auto or other dealers will have relationships with dozens of lenders that are willing to offer you loan terms. However, you also have the ability to name a lender or lenders that you prefer to work with. In some cases, you may be better off getting quotes from a bank or credit union that you do business with before you even set foot on the dealer lot.

What Happens If I Miss a Payment?

It is important to know what could happen if a payment is late or missed. In some cases, a lender will repossess the car after a single missed payment. Make sure that you have the dealer go over your loan paperwork to ensure that you are clear about you rights and responsibilities as a borrower.

Buying a new or used car can make it easier to get to work, school or wherever else you need to go. However, it is important that you find an affordable way to finance the loan that offers flexibility today and in the future in case your financial circumstances or transportation needs change.

Optimizing Vehicle Fleet Assets through Upstream Re-marketing

It is every company’s nightmare having idle vehicles in their corporate pool areas. For almost every business, this means losing money, which is certainly not a trait of a successful and prosperous commercial enterprise. Idle vehicles are not only those sitting around and waiting for a driver, but also those old and withdrawn ones waiting to be re-marketed. Vehicles which are no longer in service still remain in the company’s lot, costing the business both money and valuable space. One of the best ways to optimize your vehicle fleet is through upstream re-marketing, and here is how to get the job done.

Maximize fleet assets with pre-marketing

With upstream re-marketing, every company can make the most out of their aged fleet and used cars right before the time comes for them to be dispatched. What this actually means is that in order to be productive and save money in the process, a company should always work on dispatching the old and aged vehicles before the replacement arrives. Waiting for the last minute to do it can result in severe negative consequences. By eliminating their days to replace or sell, companies can benefit and thus generate savings in depreciation, interim interest and other costs. Stories about successful vehicle re-marketing are still being told, and it is a business that will always exist as long as there is a vehicle fleet.

Every fleet has its own solution

Each company has a different approach when it comes to upstream re-marketing The most important factor for each company is finding out what they are trying to accomplish with vehicle re-marketing or pre-marketing their fleet, advise experienced asset re-marketing specialists. There are many companies which implemented the driver sales program, allowing them to offer the driver a lower price of the vehicle as a reward for proper maintenance while the vehicle was still in service.

This method has been proved to be the most successful upstream re-marketing plan, as not only do you reward your driver for his flawless service, you also ensure that he will maintain and take good care of the vehicles to come. Opposite to this method, some companies put their vehicles up for an auction on the company’s website or do a live event, where a competitive bidding is performed. There are many individual company philosophies, and even though they might be different, that does not make them right or wrong.

Things to know as a fleet manager

If you are a fleet manager aware of different aspects of service provider agreements looking to create a truly successful upstream re-marketing plan, here are the things you should know:

1. Things you want to accomplish ā€“ Each company has different points on view in terms of success and what it means to them. By spending money on each unit in a company’s portfolio and realizing that the increase in sales is low, reevaluation of the program should be undergone.

2. Written policy ā€“ Every upstream re-marketing program should be outlined in a written policy and carefully observed with periodic evaluations of the performance.

3. Communication is the key to success ā€“ Your job is to talk to all the potential buyers throughout the entire sale process, not only at the beginning of it. Gather feedback and make sure you improve your communication with all parties involved.

Choosing a pre-marketing company that will listen to fleet manager’s needs is essential for re-marketing success. If there are any problems in communication with the fleet manager or potential disagreements along the way, it is highly advised that you find a new pre-marketing company.

Every business should choose a solution which works best for them, and the one involving a vehicle fleet is no exception. Target the market which is best for your portfolio, and design a program that will help you address the market. Remember that if something works great for another company, it will not necessarily bring the same results to you.

5 Things to Remember When Applying for an Auto Loan

Most people who are looking to purchase a new or used vehicle must first obtain an auto loan to afford the car. Auto loans are often available through financial institutions or through the dealer who is selling the vehicle. When applying for a loan, there are a few factors to keep in mind.

Know Your Credit Score

The lender will check your credit score when determining if you’ll be approved for a loan. Your credit score will prove if you’re qualified to borrow and if you have any record of collections on your history. Those who have a credit score of at least 650 are likely to be approved.

Have a Down Payment Ready

Having a down payment on hand will help to reduce the amount of money you borrow, which will ultimately allow you to spend less on interest once the car is paid off in full. The more money that you can put down, the less time it’ll take you to pay of the vehicle.

Determine the Length of the Loan

The length of each auto loan varies and can be up to 60 months long. 62 percent of auto loans are 60 months and 20 percent of loans are 73 to 84 months long. The longer you’re paying off the loan, the more money you’ll end up paying in interest.

Consider Your Employment History

If you’ve had an inconsistent employment history, you’re at risk for being denied of an auto loan. Lenders want to see that you’ll be able to make your car payment each month and eventually pay it in full.

Understand the Interest Rate

Each auto loan comes with interest that is applied, which is added on to each monthly payment. The interest often depends on the lender’s terms and the credit score the applicant. The higher the credit score, the lower the interest rate. Oftentimes, borrowers are able to negotiate the interest rate. A credit union car loan may offer some added benefits for interest rates if you are an existing member.

When applying for an auto loan, it’s important to understand the terms and how long you’ll be repaying the loan. You want to be confident that you’ll be able to afford the loan for the next several years even with a job loss. By proving yourself to the lender as a qualified borrower, you’ll be approved and can enjoy driving your new vehicle off the lot in no time.

How Can I Safely Afford the Car of My Dreams?

Finally owning the car that you have always wanted can be a thrilling experience. However, that thrill can turn to fear if the cost of the car is ultimately more than you can afford. This is why you should account for the total cost of ownership and plan ahead for how you will handle the car payment if you suffer a loss of income.

Negotiate the Right Price for the Car

This concept is one that may be foreign to many people that don’t live in a country where bartering is commonplace but negotiating a fair price for the car you want should be a high priority for you. It is generally a mistake to think of the monthly payment when negotiating a car deal. Instead, make sure that you are getting the best price for the car. Afterwards, you can negotiate the length of the loan and your interest rate to find a payment that you can afford.

Put Money Down if Possible

Putting money down ahead of time increases equity while lowering the amount that you have to pay each month. This can come in handy if you lose your job or otherwise find that you need to get rid of the car for some reason.

Don’t Be Afraid to Trade the Car if Necessary

In the event that you find your dream car isn’t everything that you thought it would be, do not hesitate to trade it in. It is much better to have financial security as opposed to a fancy car in the garage. Besides, having the car isn’t going to be much fun if you can barely afford to put gas in it.

Look at the Value of the Car Before Buying It

The best way to know if you can afford your car is to find out how much it is worth ahead of time. This gives you a good idea if you can buy the car and still have an asset that has value several years down the road. Knowing this fact is important because cars are depreciating assets that lose value over time.

Don’t Forget to Think About Insurance Costs

In addition to paying for the car, you will also have to pay to insure the car. Insurance costs could run over $100 a month if you are buying an especially fancy model. Therefore, ask your Thomson Schindle Green Insurance & Financial Services Ltd insurance agent how buying your dream vehicle could impact the cost of auto coverage. Often, people are unaware of the extra costs that can be incurred after buying a new vehicle.

Do you want your dream car to be in your garage for years to come? If so, you need to figure all the costs of ownership and possible depreciation beforehand to ensure that you can afford it without going into financial peril.