5MinuteAutoLoan.com Blog

TransUnion.com concluded its analysis of trends in the auto loan lending industry, for the second quarter of 2008. This report analyses credit card, auto loan and mortgage data pertaining to the consumer lending sector. There has only been a marginal increase in the national 60-day auto loan delinquency rate from 0.65 percent to 0.68 percent, between the first and second quarters of 2008. The auto loan delinquency rate registered an increase of 11.5 percent in comparison to the second quarter of 2007 (0.61 percent).

The District of Columbia auto loan delinquency rate was highest at 1.41 percent, followed by Mississippi at 1.25 percent. Alaska recorded the lowest auto loan delinquency rates of 0.22 percent, followed by North Dakota with 0.30 percent and Wyoming at 0.41 percent.

Alaska also revealed the largest improvements in delinquency from the previous quarter with 40 percent decrease from 0.37 percent; New Hampshire decreased 35 percent from 0.65 percent and Wisconsin decreased 18 percent from 0.55 percent.

Congress could help save billions of dollars for automakers in Detroit, by approving a $25-billion auto loan package. With two weeks to go before the elections, fierce lobbying is going on by automakers and Michigan lawmakers, who want to see it through. The auto loan could speed up automakers efforts at retooling their factories to produce hybrids and other “green” vehicles.

Congress approved the $25 billion program in 2007 in an effort to help reduce U.S. demand for oil, but did not provide the $3.75 billion that the plan was estimated to cost. The plan was put forward to help auto manufacturers to meet 35 mpg fuel economy standards by 2020. But according to government estimates, Detroit would require $30.5 billion just to meet the targets for 2015.

The auto loan package was estimated to pay for up to 30% of the costs for factory retooling, according to last year’s energy law. But it was stipulated that cars or trucks built at the retooled factory would have to top their competitors’ fuel economy by at least 25%. While automakers have the support of Democrats and some Republicans, the Bush administration has not yet approved the auto loan package. “Green” groups including the Union of Concerned Scientists and the Sierra Club oppose the plan, and demand tougher fuel economy standards for automakers.

With a squeeze on credit today, many car dealers are trying to get customers to bite, by offering them loans of up to 84 months, using lower monthly payments as bait.  The rule of thumb for anyone looking to buy an auto should be-if you can’t pay off a car in 60 months, you can’t afford it any way.  Having a car loan drag on for six to seven years can be nothing less than a financial nightmare.

Longer loans attract higher interest rates and over a longer period, you’ll be paying a higher rate. By the time the car is paid off, you would have paid a lot of money in interest, which is not tax deductible, therefore of no real benefit to you.

Your new car or truck will lose 20% to 30% within a year of rolling out of the dealer showroom. With a 60-month loan, you will owe more than what your car is worth, after two years. But with an 84-month loan, you will still owe the same in the 6th or seventh year of pay-back time. And what can you realistically hope to get when you trade your car in finally?

Your driving habits can save you money at the gas pump. If you drive a lot and don’t have a fuel efficient vehicle, the best way to save money is to change the way you drive. Timely vehicle maintenance and good driving habits can enable your car to go an extra 30-40 miles or more between re-fueling.

If you run your car on less than a quarter tank of gas, fuel from the bottom may damage the fuel injector. Therefore keep your tank at least a quarter full. Use your car’s transmission, to control it and save money. Don’t drive when you can roll. If you have a manual, don’t use the clutch to brake on an incline. Use the transmission for switching gears.

Pay attention to maintenance check-ups; prompt action can save you time and hundreds of dollars in the long run. A well maintained car also fetched a higher value in the market. Take care to warm up your car, so that the oil gets enough running time to lubricate the engine. When budgets are tight, the first thing that is compromised is routine maintenance. However, over time, routine maintenance like oil changes, tune-ups, tire rotations and wheel alignments can save money in repair expenses and fuel economy.

Car insurance providers have launched policies that exclusively target the ‘green market’, comprising of drivers who want an eco-friendly insurance product.

Most often these insurers offer green incentives or ‘carbon offsetting’ schemes, which means that a percentage of the price of the insurance will go towards carbon offsetting projects. Others are prepared to offset 100% of your green vehicle’s emissions.

A carbon offset is “a financial instrument which represents a reduction in greenhouse gas emissions”. One carbon offset represents the reduction of one metric ton of carbon dioxide, or other greenhouse gases. If you have an existing car insurance policy, contact your insurer to check if they have environmental incentives. A good place to shop for green car insurance is online. Browsing around will give you a lot of information about the level of coverage you need and the best deal you can get.

Consumers heave a sigh of relief as gasoline prices nationwide show signs of decreasing, following a slump in the demand for crude oil. On September 9th, the national average fell to $3.65, down from a peak of $4.11 in July. After hitting $145 per barrel in July, the market for crude oil collapsed when oil closed Tuesday at $103.26 on the New York Mercantile Exchange. Many financial analysts expect crude oil prices to slide below $100 in the near future.

Gas prices in California plunged 76 cents per gallon after a high in June, according to an update from the AAA of Northern California auto club. A gallon of gasoline touched $3.85, down 28 cents from the previous month. Prices in San Francisco and San Jose have also dropped by 29 cents, making $4.03 and $3.94, respectively.

Californians, who paid almost 25 cents to 35 cents more than the national average for a gallon of gas, are now relieved as prices are falling faster than in other states. High taxes, refining capacity and the use of fuel blends not found elsewhere, have always kept California’s gas prices above the national average.   The Organization of the Petroleum Exporting Countries (OPEC) has announced that it will curb production in an attempt to keep prices from falling further.

If you’re looking for a car finance loan, but are not sure where to get one, do a little homework to find out about the various sources for car finance loans.

A car loan is available at car yards, lending institutions such as banks, car finance companies and Internet car finance companies. It is in your own best interests to find the best loan available on the market. A bank can give you car finance, but the car loan market is very competitive, and you are a valuable customer, so keep all your options open. A bank may put down tougher conditions than a car finance company, before giving you a loan.

The two main ways that your car finance loan can be obtained are known as direct and indirect finance.  Direct loans are given by a single lender, and tend to be more expensive than indirect loans because direct lenders are at more risk from default. Indirect loans come from a lending company and are flexible, because the risk to the lender is less.

You can save a lot of money by shopping for the best auto loan. Narrow down your focus to some key features and check out how the loans compare with one another in terms of total up-front fees and charges; annual percentage rate (APR), total cost of the loan, prepayment privileges and early-discharge penalties.

Rick Wagoner, Chairman of General Motors Corporation will participate in a Senate Energy Summit on September 12th, to push Congress into backing a $50 billion federal loan to Detroit’s Big Three automakers.

Democrats and Republicans have been at loggerheads over rising energy prices and how to relieve them. The energy summit, scheduled for Sept. 12, was initiated by group of senators hoping to break a deadlock over loans authorized by Congress in last December’s energy bill but not funded. The $50 billion federal loan was meant to retool plants to build advanced technology vehicles.

A $7.5 billion energy bill for automakers, parts suppliers and consumer incentives was unveiled in July, by a group of senators known as the Gang of 10. The bill has now garnered the support of six other senators who moved the plan for an energy summit.

The leading automobile makers General Motors Corporation, Ford Motor Company and Chrysler LLC are considering a proposal to seek about $50 million in low cost loans from the federal government to help them modernize their assembly plants and develop next-generation fuel-efficient vehicles.

The top executives at these companies, each incurring significant losses as industry sales decline, are expected to meet the government officials in Washington in this regard, the industry sources said. They will also meet the Congressional leaders and the Federal Reserve officials, it is said. Meanwhile, it is learnt that the three companies are preparing plans to act as one entity to get low-cost funding.

The auto makers and some part suppliers are seeking low-interest loans to manufacture fuel-efficient cars as the high gasoline prices have increased the demand for fuel-efficient cars. Meanwhile, many automobile companies have been hit by the fall in the demand for trucks and SUVs as the fuel price inched towards $4 per gallon. They are hopeful of getting these loans, the industry sources said. It may be mentioned here that both Republican and Democrat presidential candidates recently supported providing more capital to automobile makers for the research and development of fuel-efficient cars.

The first thing that comes up to your mind when you decide to buy a car is – Do I have that much money? If you can afford it fully, there’s no problem. Otherwise, it is time for you to think about your finances! The point here is to get a lower car loan rate quote which makes driving your car a more enjoyable experience.

While you are planning to buy a car, research on the car loans available in your city. But before applying for the loans, take a look at your credit ratings. If you one among those with a bad credit rating, it may be difficult! Yes, a bad credit rating will result HIGH interest rates and low amount approvals. So you have to see a company that offers poor credit auto loans.

The next thing is the monthly payment. Roughly 20 percent of your net income can be used for a car payment. Plan your expenses and be at least sure to reserve this much percentage of your income for the repayment of the loan.  These are just a few tips, once you plan and plunge into action, you can get many ideas like this! All the best!