Document as many details as possible of the accident and to get witnesses who can corroborate your story. Keep track of the information you will need to file your auto insurance claim. File the insurance claim as soon as possible with your insurance company. If there is a dispute between you and the other party in the accident, you may get quizzed by the other driver’s insurance company about what happened at the accident. In this case, make sure you document everything you say and get correct details of the Insurance agent you spoke to.

If your car gets wrecked in the accident, once your claim is approved, the insurance company will assess the damage and ask you to send it to a pre-approved shop to get it fixed.

Detroit-based GMAC hiked the rate auto dealers pay for making loans outside of GM incentive programs by 0.75 percentage points. In a letter sent to dealers today, the company also said that most loans would not extend beyond a period of 60 months at the maximum. The curbs on customer credit come even as GM and GMAC stave off rumors about their own futures. 

According to Standard & Poor’s analyst Robert Schulz, GM’s sales slumped by 18 percent in 2008, and a further slide due to the credit crisis may see the automaker facing bankruptcy if business shows no signs of recovery. In June this year, GMAC had to come up with $60 billion of credit to bail itself out, as the company’s home mortgage came under severe pressure from foreclosures.

GMAC has seen some turbulent times as it posted $5.4 billion in losses owing to depressed auto sales and seven losing quarters with its Residential Capital LLC business. About 5,000 ResCap employees lost their jobs, and about 200 GMAC Mortgage retail offices were closed down because of weak responses in the real estate sector. GM holds a minority stake in GMAC after its 2006 sale to majority owner Cerberus Capital Management LP. Cerberus, a New York-based private equity firm, also owns Chrysler Financial, which has so far not changed its auto lending criteria. Spokeswoman for GMAC, Gina Proia said that the company’s focus was to manage the business prudently in the days of turbulent markets.

The first kind of auto loan and the most common is a loan that has a fixed interest rate. This necessarily means that your interest rate will not change over the entire period of the loan, and you will be protected from any hikes in interest rates during the term.

A variable-rate loan leaves you vulnerable and you may have to accept interest-rate risk, but it usually has a lower current interest rate compared to a five-year fixed-rate loan. Variable-rate auto loans will be based on the prime lending rate prevailing at the time.

A long term loan is usually only offered when you buy a brand new car, and usually lasts for thirty six, forty eight, or sixty months. This type of loan involves a smaller monthly payment, but you end up paying more over the term of the loan. One problem with a long term loan is that, the value of your vehicle may drop well below what you actually having left to pay on the loan.

A short term car loan involves a higher monthly payment, but over the course of the loan you end up paying less. On a short term car loan, you will more often than not, be offered a lower rate of interest than what was available with the long term auto finance.

You can get a home equity car loan, by offering up your home as collateral. Normally, this type of car loan carries a higher rate of interest, but there are also some tax advantages available, that can offset the higher rate of interest.

The interest on a loan is usually calculated on a flat rate or on a reducing balance interest rate which can be either daily, monthly, quarterly or annually. Stay away from attractive “flat interest rates”. The effective interest rate actually becomes higher with this method of calculation, rather than the normal methods like annual reducing balance or monthly reducing balance. The reason for this is that the principal amount doesn’t get reduced with EMI payments. So you end up paying more interest, apart from the loan amount.

On a ‘reducing balance’ interest rate, each interest payment is calculated as the previous balance multiplied by the annual interest for12 months. With each monthly payment made, the balance amount owed, becomes smaller and smaller. So the next payment is calculated including interest on the smaller balance.

According to a study conducted by Experian Automotive, auto loans amounting to nearly $25 billion are long overdue, with very little signs of pay-back capability among customers. Compared to 2007, auto financiers reported a 9% hike in loans of 30 days past due, and an 11% increase in 60 days past due. A marked decrease in the creditworthiness of people with outstanding payments, paints a dismal picture of the economic slowdown that American citizens are facing.

Lending companies now have a longer wait to get their loans repaid and have to stay afloat while they try to recover their money. According to Experian, 64 million auto loans worth $795 billion were outstanding in this year’s second quarter. Overall, 4.4 million loans were generated in the second quarter of 2008, compared to 5.1 million in 2007.

Scott Waldron, president of Experian Automotive, said that even a slight increase in delinquent loans, cripples the industry, accounting for hundreds of millions of dollars in unpaid debt. As lenders tighten their loan criteria, consumers have a tough time repaying loans, as there is a squeeze on credit as well.

How a lease buyout loan works is like this: a financing company will pay out the remaining balance of your loan to the leasing company. You, in turn, will pay the financing company in monthly payments. You have a better chance of re-negotiating a lower lease buyout deal with a small financing company, rather than with a big company.

A lease buyout loan is very helpful to small businesses that need some equipment or a company vehicle. Through a lease, it is possible to acquire these assets at a low monthly rate, with an option to buy it, at the end of the term. As a borrower, to qualify for a lease buyout loan, you must have a track record of financial stability as well a good credit report.

Very often leasing is much cheaper than buying, which is why people opt for a lease instead of a loan. Leases are available for a fixed period of three to five year. There is a fixed purchase amount at the end of that period. You can buy out the lease at the end of the term; with a “lease buyout loan”. The leased equipment or car may be used as collateral.

Your FICO score can be anywhere between 300 and 850; the higher the score, the better your credit rating is. The score will be awarded according to your financial behavior and credit history. Very often, with a high FICO score, you can negotiate for a lower interest rate on a loan.

You can improve your FICO score by regularly paying your bills, being discretionary with credit card withdrawals and wiping your old debts clean. You need to be able to handle your credit well to enjoy a good financial profile.

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 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.

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?