Tag Archives: credit score

Cheapest Car Leases – $199 or Less in 2017

best car lease dealsMany car companies offer special lease deals on selected models and styles each month. Some are very affordable at less than $200 a month.

This month, we list over 50 leases for $199 or less. The list gets larger every month as car manufacturers increasingly work to attract new customers by offering low monthly car costs.

These are usually genuinely good deals that are worth considering as long as you like the models and styles being promoted. The deals usually only last for one month, require a down payment, and have a specific mileage allowance — usually 1000 miles per month, average. Be aware that these deals may vary by region of the country.

Most lease deals are for 24 or 36 month terms. At the end of the lease you can simply return the car, or you can purchase it for the guaranteed purchase price stated in your lease contract. In some cases, you may have equity in the car (it’s worth more than the purchase price) such that it makes sense to buy it and sell it for a profit, or use it as a trade-in for another new vehicle.

Here are the cheapest car lease deals being offered at this time:

Continue reading Cheapest Car Leases – $199 or Less in 2017

Do I Need A Co-Signer?

Who needs a co-signer for a car loan? How does it work?

need a co-signer for car loanNew or first-time car buyers are often surprised at being turned down for a car loan because they have no credit history, which unfortunately has about the same effect as having bad credit. Getting a co-signer might be the answer.

Lenders want to see that a borrower has a good record with previous loans and credit cards. Without a history of credit, a borrower represents a risk to lenders. If they don’t know a borrower’s history, they take the low road and assume the worst.

It’s a familiar “catch-22″ situation in that you can’t get a loan to establish credit without already having credit. So what is the answer?

What is the answer?

The most common solution is to have someone “co-sign” your loan contract. Typically, it’s family member who has a good credit score. A co-signer plays no part in the loan unless the primary borrower fails to make payments. In that case, the loan company would have the right to seek payment from the co-signer.

Continue reading Do I Need A Co-Signer?

How to Buy a Car with Bad Credit

buy car with bad creditBuying a car with a low credit score?

Having bad credit means that sometime in your past, possibly as far back as seven or ten years, you have had missed or late loan payments, repossessed property or cars, or have declared bankruptcy. You may also have an excessive number of credit cards with high balances. These factors are included in your credit history reports that come from three credit reporting agencies: Transunion, Experian, and Equifax.

Your entire credit history is summarized in a single number, called your credit score.

Your credit score determines if you’ll get approved for a car loan, how much you’ll in interest, how much down payment you’ll pay, and even how much you’ll pay for auto insurance.

Continue reading How to Buy a Car with Bad Credit

How Car Loan Payments Work

how car loans workAbout principal and interest

If you purchase a new or used car with a loan, you agree to pay off the loan amount (principal) over a specified number of months. But you also agree to pay a finance charge, or interest, for the privilege of using the bank’s (or finance company’s) money for your purchase.

The amount of finance charge that you pay is the interest rate, which is set by the bank or finance company based generally on national lending rates and more specifically on your credit score. Interest rate is expressed as a annual percentage rate (APR), such as 5.5%.

Interest rates can be different for the same loan amount

Wholesale lending rates are lower now than in recent years but banks and finance companies, as well as dealers, can boost these rates (called reserve) for their customers. You can check current national average auto loan rates at Bankrate.com. At the time of this writing, the average 36 month new-car loan rate was 3.93% — very low. But automotive consumers may pay higher rates depending on the lender, dealer reserve, and the customer’s credit score.

Auto buyers should always know their most recent credit score before going car shopping. Otherwise, dealers know more about you than you know about yourself, which could lead to some unpleasant surprises. Getting your credit score is easy enough online. What’s your FICO score? Find out now when you check your credit report for $1 at Experian.com!

Continue reading How Car Loan Payments Work

First Car – Lease a Car?

Should I Lease my First Car?

lease a car first carMany people who are looking for an economical way to drive a new car, perhaps their first car, will look at leasing as a possible solution.

The consideration of leasing is often based on a mistaken belief that leasing is like renting and doesn’t require good credit as does buying with a loan. It isn’t renting and it does require good credit.

But is leasing a car a good solution for first-time car buyers?

The answer is — it depends.

If the first-time buyer is a teenager, less than 18 years old, leasing is not an answer.

Since leasing is a form of financing, similar to a loan, it requires that the customer be of legal age and have a good credit history. Furthermore, even if the teen’s parent leases a car to be driven by the teen, it’s still not a good idea.

A teen may not be able to stick with the requirements of a lease — an annual mileage limit of 10,000-12,000 miles, no customization of the vehicle, and minimal wear-and-tear. Insurance may be more expensive than anticipated due to the higher coverage requirements of a lease.

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Cars for Teens – Top 10 Questions

We have been an expert participant on the Yahoo! Answers web site for many years, particularly in the Cars and Transportation section, Buying & Selling sub-section. We answer questions and provide advice about a wide variety of topics related to automobile buying, selling, insurance, maintenance, and car brands.

Although the Answers site is open to anyone, we have found that most visitors and questioners are teenagers and young adults who have had little or no experience in buying, selling, or owning cars. Their questions are natural and appropriate for someone who is doing some of these things for the first time.

The web site is quite popular and is very active. Thousands of questions are asked — and answered — each day. However, in our years of participation we have seen many of the same questions being asked over and over — and over — and over again.

We have compiled what we think are the top 10 questions that teens and young adults want to know about cars. Here they are.

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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

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.

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.

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Car Loan Basics for First Time Car Buyers

A Car Loan Story

David, 17, recently graduated from high school, landed a good paying job, and wanted to buy a new car.

His thought was that he would go to his neighborhood Ford dealer where he had been admiring a bright red Focus model that he felt he could afford, and arrange for a convenient loan to pay for it. He could easily get approved for the loan because his father knows the owner of the dealership.

The car cost $12,000 with discounts and rebates. He thought a 5 year (60 months) loan would be about right because he figured payments to be $200 a month ($12,000 divided by 60 months), which he could easily afford.

David was wrong — in many ways. Let’s see why. Continue reading Car Loan Basics for First Time Car Buyers

How to Buy a Car With No Credit?

Is it possible to get a car loan and buy a car with no credit?

The answer? Yes, under some conditions. Let’s explain.

It is a common situation, especially with young people who have never had a loan, never had credit cards, or never borrowed money for a car. Without a history of prior loans and payments, there is no credit history and no credit score, which is the number that represents credit rating.

In fact it is not quite sufficient to simply have a good credit score to get a car loan — or any loan. You may also need to have an established steady income (a job) and no excessive debts. You should have no recent bankruptcies or auto repossessions, which you wouldn’t be likely to have anyway if you have no credit.

So how is it possible to buy a car with a loan when you have no credit record and no credit score? Continue reading How to Buy a Car With No Credit?