5MinuteAutoLoan.com Blog

General Motors is offering a one-year/12,000-mile bumper-to-bumper warranty on used vehicles, in a bid to draw customers shying away from cars and trucks built in Detroit. The guarantee holds good for all 2003 model year GM Certified Used Vehicles from Buick, Chevrolet, GMC, Saturn and Pontiac sold in the Japanese-made autos record better resale values than autos made in Detroit, a considerable drawback for domestic brands.

The one-year/12,000-mile bumper-to-bumper warranty will take care of vehicle flaws apart from regular wear and tear. GM gave out a five-year, 100,000-mile limited powertrain warranty for its used vehicles in 2007; its current bumper-to-bumper warranty stretches for three months or 3,000 miles.

General Motors sold a record number of 451,000 used cars and trucks in 2007; but sales figures in 2008 for certified used-vehicles were at an all time low, due to a weak economy and shy-high gasoline prices. Most consumers, hit by the credit squeeze, have made drastic lifestyle changes to delay new vehicle purchases.

A home equity loan is basically the kind of loan in which you borrow, by using the equity in your home as security or collateral. A home that you own can turn out to be a very useful asset when you want to finance your personal goals. You can use a home equity loan to pay for the renovation of your home, settle your hospital bills or pay for a college education.

Home equity loans are of two kinds: closed end and open end. Both closed end and open end loans are secured against the value of the property and are referred to as second mortgages.

In a closed-end loan, you as borrower receive a lump sum and cannot borrow further at the time of the closing. While most closed end loans allow you to borrow up to 100% of the appraised value of the home, the maximum amount of money lent will be decided by factors such as credit history, monthly income, and the value of your home. An open end loan is a revolving credit loan, where you as a borrower can choose when and how often to borrow against your property. The lender will set a limit to the credit based on the same criteria that apply to closed-end loans.

Fundamentally your credit score shows a lender, how credit-worthy you are. As a potential borrower, the higher your credit score, the better the interest rates you are likely to be offered. Whether you buy a car or a house, if you have a higher credit score, it is taken for granted that you are a responsible person, who makes payments on time, and therefore get a better rate than the person that with a lower credit score.  

Monitoring and managing to get a good credit score maybe more important than you think. Your credit score will determine the interest rate you can pay on a home loan, a car loan, on credit cards as well as for insurance on your car, your health and your home. It can also swing things your way when you are look for a job or an apartment to rent. With poor credit you may be looked upon as someone who is not a reliable employee.

You could also fall prey to a lender who will see that you need the money and suddenly raise their rates. So you have to be able to control how much debt you have, check where your expenses and try to improve your credit score.

Auto buying or auto leasing, acquiring a car, whether new or used, is easier said than done. As a buyer or lessee you need to do a serious exercise in number crunching and then let the figures speak for themselves.

In simple terms, auto leasing is meant for people who want to just “use” a vehicle, rather than purchase or own one. When you lease, you do not own your vehicle, you can use it, but must return it at the end of the lease unless you choose to buy it. You are also responsible for any early termination charges if you choose to end the lease before its tenure.

If you lease the vehicle for your business, you can benefit from tax laws as lease payments are deductible up to 100%; fuel, maintenance and insurance are also deductible 100%. Another advantage is that you can get gap protection in case your vehicle is totaled in an accident or stolen.    

When your credit score is bad, getting an auto finance loan can turn out to be a real challenge. Lenders can take advantage of the situation and charge you high interest rates, or car dealers can make you cough up huge monthly payments. When you have high payments and interest rates staring you in the face every month, you will make your credit score even worse if you default on them.

If you really need a set of wheels, try getting a subprime auto loan. This is one way to finance a car in spite of bad credit. Subprime auto loans are meant for customers with poor credit scores.  

A Sub-prime auto loan involves the sale of an automobile to a borrower who does not qualify for normal financing because of poor credit or erratic payment history. The buyer/borrower would be first required to give the dealer/lender, a down payment in cash, upon which the dealer would finance the balance of the purchase price on the car.

Most often sub-prime auto loans are given for used cars only. A Sub-Prime Auto Loan is necessarily a short term loan, which can be paid back easily and on time. This will help re-establish a good credit rating.

The Ohio Department of Insurance report revealed that homeowner insurance rates have picked up by 1.5%, even as auto insurance rates continued on a three-year decline of 2.6 percent in 2007.

Historically, Insurance rates paid by Ohio residents have been among the lowest in the nation. Ohio’s auto insurance rates are ranked the13th lowest in the country, according to recent figures from the National Association of Insurance Commissioners; Ohio ranked 6th for lowest homeowners insurance premiums. 

Lower premiums on auto insurance are the result of a competitive marketplace. Car insurance premiums are based on the car’s sticker price, the repair costs, overall safety record, and the risk of theft. Many insurers offer discounts for features such as daytime running lights and anti-theft devices that reduce the risk of injuries or theft.

Texas paid the highest cost of homeowners insurance ($1,372), and Oregon the lowest in 2005 ($491), according to the National Group. New Jersey residents paid the highest for auto insurance ($1,183), and North Dakota drivers paid the least ($554).

Are you wondering if a “no down payment” loan is a good option? Lenders will look at some factors to determine whether you’re eligible:

• How reliable you’ve been when making payments
• How your credit score may have changed.
• How the value of cars may have changed

Getting an auto loan with no down payment is an easy way for a person to buy a car. This type of loan offers borrowing without any collateral or down payment. If you have a trade-in vehicle, most dealers will accept it as equivalent to cash down, and issue an auto loan with no down payment. The trade-in will help lower monthly payments for the life of the loan.

Check out the principal, interest, and fees so that when you apply for an auto loan with no down payment, you can see exactly what it will cost monthly, yearly and for the term of the loan. You must make sure that the auto loan with no down payment, does not outlive the life of the car.  

 One advantage is that the financing for this kind of a loan comes from two sources - the value of the vehicle and the money financed. As a borrower you should work towards steadily improving your credit rating and shop around for an entry-level car that is pretty basic and reliable, not fully loaded with extras. If you’re a first timer, try and get a term for 3-4 years or less, so that you can pay it off on time, repair your credit, and finish off with a vehicle that still has good resale value.  

It’s not hard to get an auto finance loan, but familiarizing yourself with its implications is often a different ballgame. An auto loan is a binding agreement between a lender and a borrower. The advantage to getting an auto loan is that you don’t have to the cash in your hands, before you buy the car. The disadvantage is that the loan will attract interest over time, which results in you eventually paying much more than the actual cost of the car.

Get your Credit Report together, as any lender will need to review your creditworthiness.  Collect up money for a down payment, which is what you first pay to obtain an auto loan. The more you pay down, the less you will require as finance from the lender.

Study your finance contract carefully and scrutinize the terms and conditions, to make sure they are favorable to you. Try and bargain for a low interest rate; interest is the percentage you pay on the money you borrowed.

The principal is the amount of money given to you by the lender. Every payment you make is diverted towards paying the principal and towards interest. Find out the duration of the auto loan; remember you will have to make a commitment to pay up every month, for the entire term. Most auto loans stretch for 24, 36, 48, or 60 months.

Auto finance companies in the U.S. are switching to longer-term car loans, in an attempt to downsize their involvement in the leasing business.

Long term auto finance loans have a slower repayment of principal, as well as increase the risk of losses resulting from defaults in payments. Leasing companies in the auto finance industry also have to cushion themselves with reserve funds to make up for possible losses from these car loans.

These kinds of car loans now stretch as long as 7 years or 84 months. GM, Ford and Chrysler LLC, consider long term auto loans as a way of shedding heavy inventories. Soaring fuel prices have caused a catalytic decline in consumer’s confidence and have hit the fortunes of auto makers, who are now faced with plunging sales especially in the pickup trucks and sport-utility segments.

Long term car loans such as 72 or 84 months, can reduce monthly payments for buyers, putting them on par with payments under leasing agreements. However long term car financing heightens the risk factor of defaults, as the unpaid principal would be higher than that of a short-term loan. Auto financing companies need to factor the loss perspective into the prices charged to customers who avail such loans.

Presidential candidate, Senator Barack Obama said that he would like to see 1 million plug-in hybrid vehicles on American roads by 2015. He also offered tax credits to buyers of hybrid automobiles and outlined plans to help American auto manufacturers achieve the goal of fuel efficiency and reduced dependency on oil imports.

Speaking at Michigan’s Lansing Center, Senator Obama said that he was keen to end oil imports from the Middle East and Venezuela within 10 years and give fillip to Michigan’s domestic carmakers, by making it a hub for the future production of fuel-efficient and alternative fuel vehicles.

Obama’s proposed energy plan includes an expenditure of $150 billion over the next 10 years to meet the demand for fresh energy sources, a plan that is expected to create 5 million new jobs. The costs for the plan to raise mileage standards, provide incentives for auto companies and consumers to switch to hybrids, would be met by a proposed windfall profits tax, ending $20 billion in subsidies to oil companies.

The Illinois Senator was offering $4 billion in loans and guarantees to carmakers to develop plug-in hybrids. Consumers would get a $7,000 tax credit for buying the fuel efficient vehicles; and taxpayers a $1,000 rebate to make up for high energy prices.

A mid-July news poll revealed that voters in Michigan named high gas prices as second to the economy, in terms of important issues facing the country. Energy issues figure largely in the presidential campaign and will determine the way popular votes swing.