5MinuteAutoLoan.com Blog

Plummeting house prices and over-leveraged borrowing are common-place scenarios in most of America’s cities. According to first-quarter data from TransUnion, a credit-reporting company, seven of the 10 most credit-delinquent cities in the U.S. exceed the national average by two or three times.

In Stockton, California, 8.87% of borrowers were 60 days behind on their loan payments in the first three months of 2008. Laredo in Texas is the top debt-burdened city for auto loan delinquencies at 2.2%. Pine Bluff in Arkansas has the most number of people behind on their credit cards, at 2.28%.

Filings for foreclosure leapt 55% in July, compared with 2007, and increased by 8% since June, according to RealtyTrac. Across the country, more than 272,000 homes received foreclosure notices this July.

Central California is under the spotlight, as the nation’s second-highest state for foreclosure rates behind Nevada, according to RealtyTrac.

Funding for a new program that would reduce domestic dependence on foreign oil and create jobs and technologies in the US, has received support from 71 US House members. The program would be required to lend up to $25 billion to automakers and auto parts suppliers over the next couple of months, a move that is crucial to the future of the US auto industry.

The Advanced Technology Vehicles Manufacturing Incentive Program was initiated to help car manufacturers to concur with new fuel economy standards of 35 miles per gallon by 2020. The $25 billion in loans would be limited to 30% of the cost of any plant or technology program and engineering work within the United States.

The Alliance of Automobile Manufacturers asserted that the NHTSA’s goal of raising fuel economy standards by 4.5 percent per year between 2011 and 2015 was “not technologically feasible or economically practicable”. Raising fuel economy standards would put additional pressure on an industry already reeling from dismal sales figures and economic distress, they said. The alliance said NHTSA had underestimated the costs related to improving technology.

The NHTSA has the task of implementing a law passed by Congress in 2007 that required new cars and trucks to meet a collective fuel economy average of 35 miles per gallon by 2020.

An Amortization schedule gives you a detailed break-down of each payment on a mortgage, as calculated by an amortization calculator. It is a helpful tool that will show you all the information about your loan and help you make your payments on time.

On any mortgage, every payment is apportioned between the interest as well as the principal amount of the loan. The exact amount paid up towards the principal varies each time, and the remainder goes to interest.

An amortization schedule shows you how much money is paid towards the interest, as well as how much towards the Principal balance, with each payment. When a mortgage is first taken out, a large portion of each payment is paid to interest. Over time, as the loan matures, more money goes towards paying down the principal.

Amortization schedules are arranged according to dates. The first payment is made one full payment period after taking the loan and the last payment will mop up the balance of the loan completely.

An amortization schedule breaks down your payments into interest and principal amounts, and gives you a time schedule of the dates to pay your interest, principal, and the remaining balance on principal.

The benefit of a loan amortization program is, knowing when your loan will be paid off. The more you pay, the less interest is paid; thus the loan is cleared more quickly. Making one extra payment means you automatically reduce the amount of interest you would otherwise pay.

The concept of Car Lease Finances is different from car finance, which finances the purchase of a car.  Auto leasing, pays for the use of a car, truck or van over a period of time and is different from renting. A car may be rented for hours or days, but a minimum period of leasing is 2 years. There are two kinds of car lease finance that you need to know about.  

One is a Closed End Lease: Whereby the person who leases the vehicle (lessee) returns it at the end of the lease period to the leasing company. In a closed end lease the lessee has no liabilities other than paying for any damage or excess mileage (agreed upon earlier). 

In an Open End Lease: The lessee bears all the financial risks associated with the leasing of the vehicle. An open-end lease is best suited to commercial businesses, because the market value of the car is fixed at the end of the lease contract. This value is compared to the original value of the car, and you pay the difference in values; which could set you back quite a bit, financially. 

Monthly payments on leasing are 30%-60% lower than other kinds of loans for the same time period. On a lease, you only pay for a portion of the car’s value over the lease period. Down payments on a lease are usually much smaller as well. Normally you pay a deposit of your first monthly payment, as well as tax, title and registration fees. You can also put down a larger deposit, to reduce your monthly payments. ¼/p>

Buying a car fundamentally involves making a serious monthly financial commitment. To make it easier on yourself, calculate your car loan well in advance and check if it is easy on your budget. You will have a better understanding of your payments and less chances of defaulting on it.

Calculate your down payment and then deduct it from the price of your car. Further deduct your trade-in-value. The resulting amount is more or less what you would be paying on your car loan.

Calculate the total amount of cash you need to have, to buy your new car. Make sure you actually have more money than that quoted on the sticker price of the car. There will always be fees, minor and other small expenses before concluding the sale, which may hike the total price of the car.

There are many online tools to calculate your car loan for free. Use a financial calculator when you are ready with all your figures.

Check on how much money your new car will cost to insure. Any insurance company will be able to give you an estimate on how much and what sort of coverage you need on your new car. Make sure you opt for extra safety features like airbags, which will save you money on insurance payments in the long run.

It’s not really difficult to learn about different kinds of auto loans, but knowing their intricacies is often a whole new game. Sometimes we lose out on little details that could make life easier with a personal car loan. When you apply for an auto loan, you need to know that you have a fair chance of approval. However, not everyone’s credit is good enough. A secured auto loan is one way you can help your chances of being approved for an auto loan as fast as possible.

Secured auto loans are easily available, but a buyer must be careful to make efforts to get such a loan at a comparatively lower interest rate, to save money. To get the cheapest secured loan to suit your budget, pay special attention to the collateral or security you are going to offer to the lender. The value of the collateral offered will determine a lower interest rate and the loan amount. For example, a home is something which has high value, so you can get a secured car loan against it. Most lenders will readily provide you with a bigger loan amount at a lower interest rate, under such circumstances.

Secured personal car loans normally offer between 90% and 100 % of the cars’ total cost. So if you want to buy a luxury car, you can do so, as the full amount may be financed by the loan. Secured car loans for a new car, are usually best taken for a short term ranging from 36 to 72 months, even though you can get one for 2 to 7 years. Two factors will help to ease your repayment: One – keep the loan repayment term as short as possible. And Two - take a smaller loan lower amount and get a lower interest rate. If you are looking at buying a used car, that car should not be more than 5 to 6 years old.

Drivers in Michigan now benefit from a new Auto Insurance rate plan that puts savings back in the pockets of thousands of customers like themselves. The new plan introduced by GEICO will come into effect on July 3, 2008, for new policy holders and October 1, 2008, for policies that need renewal. 

The new auto insurance rates will include- premium changes for motorists, based upon factors such as risk perception, coverage, geographic area, type of vehicle, and other discounts available. Millions of Michigan drivers can now take a fresh look at new car insurance, compare rates and save on auto insurance premiums. 

GEICO is one of the largest and fastest growing auto insurance companies in the US and meets the insurance needs of the people of Michigan. Find out more about competitive auto insurance rates, accident forgiveness, claims services and savings on insurance premiums. 

If you want to buy your dream car, but can’t afford the monthly installments that you need to pay off, would a car loan that stretches to 7 years or longer actually lower help with auto loan rates and monthly payments?  

At a meeting in February 2008, Toyota Motor Credit acknowledged reducing the consumer’s payments and boosting sales by extending 84-month/7year loans. According to Power Information Network, a unit of consultant J.D. Power and Associates GMAC, various credit unions also offer 84 months; and 0.1% of auto loans are for longer at 96 months to nearly 102 months; around 82% of auto loans range from 60 to 77.9 months.

With today’s credit scenario being what it is, most buyers take long loans to get the best auto loan rates and retain their vehicles for a long time period.

Source: USA Today

When many consumers sketched out their automotive budget while shopping for a new car, few could predict $4 per gallon gasoline. The near doubling of gas prices over the last year has wrecked havoc in many driver’s pockets and left them with the dilemma of having to choose between filling their car with gas or making the payments. And those are the lucky ones. According to The Columbus Dispatch, one unlucky repo victim could afford neither.

Source: The Columbus Dispatch

The rule of thumb says that the amount of money you pay toward debts should be within 30% of your annual income. If you are considering an auto loan, add up the total amount you pay off as debts each year, including the amount you plan to pay on your car. If this amount exceeds 30% of your annual income, you’ll need to lower your debt-to-income ratio immediately. This means that, you either clear some debts before applying for a car loan, or reduce the amount you want to borrow.

Make timely payments on your other credit accounts prior to applying for an auto loan. If you have made timely payments for a few months, it could improve your chances of approval by the lender. You must also refrain from applying for other forms of credit. Inquiries on your credit report also lower your credit ratings.