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Zero Down Car Lease

zero down car leaseLeasing can provide an affordable option to anyone needing car financing at minimum monthly cost. Upfront cost can also be minimized by paying no money down — $0 down payment.

Lease payments are 60% – 110% lower than loan payments for the same car. And most leases can be obtained with zero money down— $0 down.

So what’s the catch?

First, leasing is a bit more complicated than buying a car with a loan. If you don’t understand how leasing works, or how to determine if it’s right for you, you should skip it until you take the time to learn about leasing — from LeaseGuide.com.

Second, in order to get a zero down car lease, you need a good credit score. In fact, you may need a better score than you would need if you were buying with a loan. You should always know your current credit score before going car shopping.  What’s your FICO score? Find out now when you check your credit report for $1 at Experian.com!
Continue reading Zero Down Car Lease

Auto Loan Rates – How to Get the Best Rates

car loan rateWhen you buy a car with a loan, you not only pay back the amount borrowed but you also pay finance charges (interest).  Each month’s loan payment consists partly of principle and partly of interest. Actually, the amount of principle and interest changes each month, although the total remains the same. In the beginning, you pay more interest and less principle. Near the end of the loan, you are paying nearly all principle.

The amount of finance charges you pay depends on the interest rate and the length (term) of your loan. Interest rates can vary between different lenders. The interest rate you pay also depends on your credit score. Someone with poor credit will pay a higher rate than someone with outstanding credit. More about credit later.

Interest rates are generally higher for used cars than for new cars. And longer loan terms have higher interest rates than shorter loans.

At the time of this writing the national average new-car interest rate is about 3.0% for a 4-year car loan and a bit higher for used car loans. Dealers sometimes add a percentage point or two for additional profit. This is called “reserve.”

Continue reading Auto Loan Rates – How to Get the Best Rates

5 Tips for Getting an Auto Loan

tips for getting auto loansFor many people, an auto loan is the most significant and largest financial transaction they make in their lives — at least until they get a home mortgage. Because it is so significant, it makes sense to take the right steps and avoid mistakes in the process.

1. First, shop around for auto loans at your local banks, credit unions, and financial companies. You don’t have to finance through your car dealer. In fact, by shopping around first, you’ll know if your dealer’s loan offer is good or not. When you talk to a bank or credit union, you may also be able to get pre-approved at a guaranteed interest rate and for a given amount. That way, you’ll know what price car you can afford when you go to your dealer. You are not obligated to accept any loan offer you receive, even those for which you are pre-approved.

2. Know your credit score. Your credit can make the difference between getting approved for a car loan or not. If you are approved, your credit score will determine the interest rate you pay and the down payment amount you’ll have to make. Car companies offer special promotional deals each month, such as 0% APR loans and low-payment leases, which require good credit. To get the best rates and best deals you’ll need a credit score of 700 or above. What’s your FICO score? Find out now when you check your credit report for $1 at Experian.com!
Continue reading 5 Tips for Getting an Auto Loan

0% Car Loans – Zero Interest

Car manufacturers are constantly offering low-interest loans and other incentives to help sell cars.

With “normal” interest rates around 3.0% at the time of this writing, it’s not much of a stretch for car companies to offer 1.9%, 0.9%, or even 0% loan rates.

A zero-percent (0%) loan means no interest at allno finance charges for the life of the loan. Some car company deals limit no-interest loans to 36 months but some extend it all the way to 60 or even 72 months.

Understand that no-interest loans are not something you can get by negotiating with a dealer. These promotional loan deals are only offered by car manufacturers on selected models and styles for a limited amount of time.

How much money do you save with a 0% loan?

Continue reading 0% Car Loans – Zero Interest

Quick Guide to Buying a Car

guide for first car buyersFirst-time car buyers are often unaware of everything that’s involved in the process. It’s not surprising because it’s not simple and not like buying anything else that we normally buy, even a house.

We’ll explain it all in this quick guide to buying a car. Further details can be found in the various articles posted on this web site.

1. Decide on a Car

Choosing a car for the first time can be a bewildering experience because there so many choices — old cars with lots of miles on them, newer cars with better safety and tech equipment, small cars, compact cars, sedans, coupes, large cars and SUVs, sports cars , fast cars, fuel-efficient cars — not to mention all the different makes, models, and styles that are available.

Decide what kind of car you want or need and what’s important to you. Do you want good looks, safety, good gas mileage or high performance, automatic or manual transmission, 2-wheel drive or 4-wheel (for winter weather), sporty 2-door coupe or 4-door sedan or convertible, passenger car or roomy SUV or minivan? Do you want good reliability and dependability, and low insurance cost? What is is your budget and how much can you afford, either as a cash purchase or as monthly loan payments?

Continue reading Quick Guide to Buying a Car

Car Loan – In Plain Language

car loan explainedYou, the car buyer, wish to purchase a car but you don’t have the necessary cash.

You need a car loan.

A bank or credit union can provide you the loan you need, or your car dealer can arrange the loan for you with a bank or finance company that he works with. Understand that dealers generally don’t make loans nor approve them.

The bank or finance company explains the loan to you in this way:

“We are willing to loan you our money to pay the dealer for your new car, assuming we check your credit history and find that there is not a risk that you won’t pay us back our money. If you have no credit history or your credit is poor, we may decide to turn you down. We might also turn you down if you do not have a steady source of income that will allow you to repay the loan. If you can get a co-signer with good credit and a good income who is willing to sign with you, we may reconsider”.

Continue reading Car Loan – In Plain Language

What is a Credit Report?

credit reportHow do I get my credit reports and my credit score?

Whenever you apply for any type of credit or financing, a credit report is pulled from at least one of the three major credit bureaus. While there are hundreds of smaller credit bureaus around the country, virtually every credit bureau is affiliated with Trans Union, Experian, or Equifax.

These credit bureaus collect and maintain information on the vast majority of Americans, but they are not affiliated with the government in any way. The credit bureaus are for-profit corporations that sell your personal information for money.

The credit bureaus receive your personal information through the same lenders who grant you credit. They have agreements with each of these credit grantors that require the credit grantor to inform the credit bureaus of everything that occurs in your relationship with the credit grantor. If you make a payment late, the negative credit listing is quickly reported to at least one of the three major credit bureaus and is added to your credit history.

Low Interest Rate Car Deals

Car manufacturers and dealers often have special loan rates available for limited-time promotions. Are these deals worth considering? Do you save money by accepting low-interest loan deals?

We see a lot of variations of low-interest loan rates from car manufacturers. Some are 3.9%, some, 1.9%, some 0.9%, and even 0%. What’s the difference? Is a 0% APR deal much better than a 1.9% APR deal?

First of all, low-interest loan rates are almost always limited-time promotional deals being offered by finance companies associated with a car manufacturers, such as Ford’s Ford Credit or Honda’s Honda Financial Services. Dealers do not set loan rates. Customers sometimes incorrectly think that, with a high credit score, they should be able to get a 0% or super-low interest rate at any time.

Let’s take a look at how low-interest new-car loans stack up.

Continue reading Low Interest Rate Car Deals

First Car Questions

We answer questions from first-car buyers almost every day when we participate on the Yahoo! Answers web site in the Car Buying and Selling section. The majority of those questions come from teens and young adults who have little or no experience in buying, trading, or selling cars.

In the few years that we’ve been doing it, we have seen certain common questions come up over and over again. Some come up numerous times in a single day.

We thought we would post some of the most frequent questions here, and answer them just as we do on Yahoo! Answers.

Here goes.

Q.  How many miles are too much for a used car?  How many miles will I get from this used car?

A. All used cars are different. It’s not possible to say that a certain car of a certain age and of a certain brand that has 150,000 miles is a good car. It depends on how it has been driven and cared for. Some cars with only 50,000 miles are ready for the junk yard, while others with 150,000 miles are good for another 150,000.  Even brands such as Honda and Toyota, that are known to be very reliable, can have serious high-mileage problems. Therefore, don’t make a purchase decision based on mileage alone. Get a professional mechanic to inspect your car before you buy. It’s the actual condition of the car, not mileage, that is important.

Continue reading First Car Questions

How Do Car Notes Work?

car leaseCar notes, or car loan payments, are the monthly payments made after a car is purchased with a loan from a bank, credit union, or finance company. Some dealers provide financing directly, in which case car notes are made directly to the dealer, but in most cases dealers simply arrange financing with a bank or finance company that he partners with. In that case, car note payments are made to the bank or finance company.

Car buyers who need a loan can apply at a bank or credit union prior to looking for a car. In this way, they can be pre-approved and will know exactly how much they can borrow and what their loan finance rate (interest rate) will be. When they finally decide on a car and are buying from a dealer, they can compare the dealer’s financing with the bank’s financing and go with the best deal.

Continue reading How Do Car Notes Work?

How to Buy a New Car

New Car, First Car

If you’ve decided that your first car will be a brand new car, there are things you need to know about the buying and financing process that makes it different from buying a used car.

New cars – only from dealers
All new cars must  be purchased from state-licensed and manufacturer-authorized new-car dealers. It’s the law. It’s the only way you can buy a new car.

If a car has never been titled or registered, it’s considered to be a new car. Even if you initiate your purchase through an Internet car buying service, or through a buying service at warehouse stores such as Sam’s Club, the car actually comes from a local new-car dealer. Continue reading How to Buy a New Car

All You Need to Know About Buying a First Car

Guide to buying a first car for teensFor teens and young adults, buying that first car can be an overwhelming experience. There just seems to be so much you need to know in order to make the right decision and not make huge mistakes.

It’s true that buying a car— any car — can seem a bit complex at first, but if you take the time to learn the basics and understand how the process works, you’ll be doing it right in no time.

At FirstCarGuide.com we take you through how to choose the right car, how to inspect a used car, how to know what to pay, whether to pay cash or buy with a loan,  how your credit affects your ability to get a loan, how to buy insurance and what insurance is required, and what happens if you have an accident.

Learn how to buy a car from an individual seller and what to watch for. How buying from a used car dealer works, and potential problems. Whether to buy new or used. What’s too much mileage.

We also discuss whether it’s better to buy or lease, how leasing works, and how to calculate car lease payments and costs.  Who should lease and who shouldn’t. Which cars are best to lease.

Car Buying Checklist – 50-Point Self-Inspection Guide

checkmarkUsed Car Inspection Checklist

Use this handy 50-point checklist when buying and inspecting a used car. Print it and take it with you.

 

Wheels and Tires

chkboxAre tires worn to unsafe level (less than 2/32″ tread depth at lowest point)?

Tires with less than 2/32″ tread depth at lowest point are unsafe and should be replaced immediately. Less than 4/32″ is unsafe in rain. Less than 6/32″ is unsafe in snow. Hint: Buy a cheap ($5) tire tread-depth gauge at any auto parts store, Wal-Mart, or Sears

chkboxAre left/right tires worn unevenly on front? On rear?

Unevenly worn left and right tires are unsafe and cause handling and steering problems. It might indicate a bent or twisted frame as a result of an accident. Always replace tires in pairs

Continue reading Car Buying Checklist – 50-Point Self-Inspection Guide

How to Buy a Car from an Individual Seller

How do I buy a car from an individual private seller — not a dealer?

When you buy a car from an individual, you pay with cash, a money order, or a bank cashiers check. The money can come from savings, a checking account, a family loan, or a loan from a bank or financial company. Most sellers do not like personal checks.

Buyers sometimes expect a private seller to “take payments” but any smart seller will not agree to such a plan. It is too risky. As a buyer, it’s better to get your own loan.

Requirements for a car loan

Loans from banks or finance companies require that you have a not-so-bad credit score, have an income sufficient to repay the loan, and have no excessive debts that might interfer with your ability to repay the loan. Loan companies do not want to give money to people who are unable to repay a loan.

Buying a car with bad credit – or no credit

People who have a bad credit history — a history of not making payments on time or of missing payments on other loans – will have problems getting a car loan. The lender will assume that if you have had problems in the past, there is a good chance that you’ll have problems again.

Continue reading How to Buy a Car from an Individual Seller

Basics of Car Leasing

How Does Car Leasing Work?

Car leasing is extremely popular because it offers a more affordable method of auto financing. It allows you to have lower monthly payments than with traditional auto loans. About one out of every five vehicles driven by automotive consumers in the United States are leased.

But car leasing is not for everyone. Is leasing good for a teen’s first car? What are the pros and cons of leasing?

Leasing is a little more complicated than buying with a loan, so you should take the time to learn about leasing, and be sure it’s right for you before making a decision.

What is a Lease?

Both leasing and buying a car with a loan are simply two different methods of financing. Where a purchase loan is a method of financing the ownership of a vehicle, leasing is financing the use of a vehicle for a specified number of months, similar to renting but not quite the same thing. Continue reading Basics of Car Leasing

Lease vs Buy Calculator

How to use a Lease vs Buy Calculator

When you use a Lease vs Buy Calculator such as the one at LeaseGuide.com, you should understand how it works and how to get the results you want.

Car leasing is a little different than buying a car with a loan. The language is different, the process is different, and the way that payments are calculated is different. Let’s take a look at how you would use an online lease vs buy calculator to better understand the differences. Continue reading Lease vs Buy Calculator

Negotiating Used Car Prices

How do I know what price to pay for a car?

Let’s say you see a nice used car that you like on a dealer’s lot that is priced at $14,000. Is it a good price? Can I talk the dealer down to, say, $12,000? How much discount can I expect to get?

These are all common questions when shopping for used cars, especially if it’s your first car.

Let’s look at the answers.

Used car prices can vary greatly – even for the same make, model, year, and condition. Prices tend to follow the laws of supply and demand. Large gas-guzzling SUVs are cheaper in times of high gas prices. Convertibles are more expensive in sunny Florida than in cold North Dakota. Used car prices are cheaper when dealers have too many on their lots.

Dealers are experts at knowing local car-buying customers, what they want, and what they are willing to pay. They set their used car prices accordingly. However, dealers make more profit on used cars than on brand new cars. This means there is a lot of “wiggle room” in used car prices – a relatively large difference between what the dealer has invested in his cars and the prices he sets for those cars. Unfortunately, there is no way for us as consumers to know what a dealer has paid for his used cars.

Check prices to know what is fair

The first step to getting a fair price on a used car is to find out how much the car is worth. Is the dealer’s asking price fair or not? If not, then it is time for some negotiation.

Some newcomers to car buying assume that there is some kind of “standard” price for used cars. It is not true. However, there are used-car pricing guides, such as Kelley Blue Book and NADA Guides, that compile data from a variety of sources to publish their version of suggested prices, based on make, model, year, equipment, mileage, condition, and region of the country.

These guides often differ significantly in prices for the same vehicle, same mileage, same everything. Confused car buyers often ask, “Which is right?” or “Which is more accurate?”  Neither is more right or more accurate. However, the guides serve as a good benchmark for determining a fair price for a car you may be considering to buy. For example, if a dealer is asking $14,000 for a car that the guides show as only being worth $10,000, he’s asking too much and it’s time to negotiate a fairer price.

If you don’t check prices

We’ve seen questions from car buyers who ask something like, “How much can I talk a dealer down on this $14,000 car?”  The answer to the question is really another question. It is not so much how much you can talk him down, as it is how much is the car worth?

For example, a dealer may put a $14,000 price on a car that is worth only $10,000. He hopes that he’ll get a customer who hasn’t done her price research and who will “talk him down” to $12,000. The customer is happy because she thinks she got a $2000 price discount, and the dealer is happy because he sold the car for $2000 more than it was worth.

Asking prices are not selling prices

Nearly all used cars are sold for a price that is less than the original “asking” price. Dealers post asking prices on used car window stickers. Individuals selling used cars advertise them with asking prices. Dealer asking prices may be 20% or more higher than selling prices. Individuals usually price their cars about 10% higher than the price they are willing to accept.

Negotiate based on car’s condition

If you find a car you like and the price seems fair for a car in good to excellent condition, make sure you get a mechanic’s inspection and have the mechanic document any problems he finds. Assuming the problems are not serious enough to stop you from buying the car, use the mechanic’s report to negotiate for a lower price.

Also get a Carfax vehicle history report and do the same thing. If the car has been in an accident, even if the repairs have been done expertly, use the information to try to get a better price.

Where to buy

Used-car dealers are an obvious source of  used cars but it takes time to visit and find out which ones have cars you might be interested in. One way to save time is use an online site such as UsedCars.com that lets you search for discounted cars from dealers in your area.

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Can I Refinance My Car Loan?

refinance auto loanRefinancing your car loan can often lower your monthly payments.

Auto loan interest rates are hovering at the lowest rates seen in many years. If you are currently paying a high rate, you may be able to benefit by refinancing at a lower rate.

Depending on the value of your car and the amount you owe on your loan, you might even be able to refinance and get cash back out of the deal.

Refinancing an auto loan is similar to getting any other used-car loan. You might refinance with the same company with which you have your current loan, or you might go to a different bank or loan company.

If you bought your car new and financed your loan through the car manufacturer’s “captive” finance company, you might find that the company does not do refinance loans. In this case, you’ll have to go to a bank or loan company for your loan.

Loan rates vary between different banks and finance companies. Refinance rates are usually higher than new-car rates, but lower than ordinary used-car rates. Shop around for the best rates.

Continue reading Can I Refinance My Car Loan?

Used Car Values

used car valuesOne of the most frustrating things about buying a used car is knowing not how much it’s worth — its value — a fair price to pay.

Two cars of the same year, make, model, condition, and mileage can have two very different values, depending on who is making the valuation. Even the same car can have different values, again depending on who you ask.

Companies such as Kelley Blue Book (kbb.com) and Nadaguides (nadaguides.com) make it their business to publish used car value guides, where their values are based on a number of variables such as auction prices, mileage, condition, optional equipment, market supply and demand, regional differences, and past price history. With all their expertise and experience, the values they produce are nothing more than educated estimates. One company’s analysis of the data will nearly always produce a different result than another’s.

Continue reading Used Car Values

What is the Best Car?

best car Honda CivicWe see this question being asked frequently: “What is the best car to buy?”

Of course, the real answer as to what is the best car can vary, depending on your own personal needs, preferences, and finances. Some people place a great deal of importance on reliability. Others might think safety or cost is more important. And others might feel that the best car should have great looks and high performance.

Many people believe that to get the best car, you must spend a lot of money — that the best cars are the most expensive one. Strangely, this is just not true. Actually, some of the best cars are the least expensive — and some of the most expensive cars are the least reliable and the least efficient.

One of the best automobiles, overall, is the Honda Civic. Why? Because it has the most perfect combination of all the factors that most car buyers look for — cost, fuel efficiency, reliability, cost of operation, cost of insurance, style, performance, resale value, riding comfort, luxury features, and handling.

Continue reading What is the Best Car?