How to Add Your Name to a Car Title By Refinancing the Car

If you do not have your name on a title for a vehicle, you do not have any legal right to the vehicle. You cannot sell the vehicle, legally have work performed on it or register it under your name. Adding your name to a title on a vehicle that is financed is not possible without refinancing the car loan. Refinancing a loan for a car requires applying for a new loan and being approved but will also add your name to the vehicle's title.

Instructions

1

Contact the financial institution you would like to use to refinance your current car loan. You can use the current lender or select a new lender. Ask for a car loan application and state there is a current loan that will be refinanced and you wish to add your name to the car title.

2

Complete the car loan application. Fill in the information on the parties applying for the loan. This will, usually, include full name, address, date of birth, Social Security numbers, employer and income as well as all of the information regarding the current loan to include name of finance company, year, make and model of vehicle and the payoff amount.

3

Return the completed application and bring any copies of items the lender requests. This usually includes copies of recent pay-stubs and proof of identity. Upon successful refinancing of the loan, the lender will have a new title created with the names of the people on the loan added to the title. The lender will be listed as a lien-holder on the title.

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Financing for Buying a Car

You may need to borrow money to buy the car you want. If this is the case, you have several options when it comes to choosing the right type of financing for the job. Shopping for financing before the car and looking at the costs involved can be beneficial to the process.

Financing First

Shopping for financing before you shop for a car can help you get the best deal. Many consumers make the mistake of simply walking into a car dealership without doing any research or shopping around first. While you could get financing from the dealer, it often works to your advantage to secure the financing before you find the car. This way, you can shop around and find the best rate instead of simply taking whatever the dealer has to offer at the time.

Special Offers

If you do decide to work with the car dealer when financing your car, you may be able to take advantage of some special offers. For example, one of the most common offers that car manufacturers provide is 0 percent interest. To qualify for a 0 percent interest offer, you typically have to have an excellent credit score. If you only have a decent score, your rate could be substantially higher. It is also important to remember that you can still negotiate the price of the car regardless of what financing the company offers.

Terms

When financing the purchase of a car, it is important to understand all of the terms of the loan. For example, you need to agree on the down payment amount as well as the value of your trade-in if you have one. Many lenders will also offer GAP coverage on their loans. This is a type of insurance coverage that reimburses you if you have a wreck and the value of the car is less than what you owe against it.

Approval

The approval for your financing will depend on your credit score as well as your income level. If you cannot get approved for a traditional car loan, you may think about finding a co-signer. A co-signer will help your odds because the financing company will look at their credit as well as yours.

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What to Do at the End of a Car Lease?

Leasing a car can be a way to get a more affordable payment on the car you really want. At the end of the lease, you are faced with a few options. Since you do not own the car, you have to decide what to do with it and whether you want to get another vehicle.

Walk Away

One option that you have at the end of the lease is to walk away from the car. Once the lease is completed, you have no further obligation to the car or to the agreement. You can simply decide to drive the car back to the dealer, hand over the keys and then leave. If you do not want to continue driving the car and you have another means of transportation figured out, this might be the best option for you to pursue.

Buying the Car

Another option that you have at the end of your lease is to buy the car. If you really liked your car throughout the lease period and it has been reliable, you may consider buying it. When this happens, you will usually end up paying much more for the car than you would have had to pay if you would have purchased it when it was new. Some leases include a purchase amount that was negotiated at the beginning of the lease contract. In other cases, you may be able to negotiate the price of the car at this point.

Extension

When your lease expires, you may be able to extend it. If you are happy with the car and the payment that you currently have, this might be the best option. With an extension, you simply sign another contract. The terms will basically be the same as what you were already used to with your previous lease agreement. The dealer will continue to own the car and you will continue paying to use it.

Expenses

If you are considering turning your car back into the dealer at the end of your lease, you might have to deal with some extra expenses. Your dealer could charge you for any extra damage to the car or for extra mileage. Throughout the term of the lease, you need to make sure that you do not drive more than your mileage limit so that you can avoid overage charges. You may want to have the car serviced and detailed before you turn it in so that you can avoid extra charges for wear and tear.

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How to Get Your Ex-Wife Off of Your Car Note

Your car note, also known as a car loan, is a contract between you and the lender. If your ex-wife's name also appears on the car note, she is part of the contract as well. Your divorce agreement will detail who gets to keep each piece of property and who is responsible for paying the loan. When you have to pay the car note, you must take your ex-wife's name off the note so she is not legally liable to pay that debt anymore.

Instructions

1

Call your current lender, explain that you and your wife just divorced and ask whether the lender would be willing to remove your ex-wife's name from the car loan without a refinance. This is unlikely, but it never hurts to ask because it is the easiest solution. A lender might be more willing to comply if you have very good credit, a good payment history and are close to the end of your loan repayment.

2

Ask your lender for the payoff amount on the car loan, including a prepayment penalty if there is one.

3

Apply for a car loan refinance on your own with the lender who holds your current car note or a different lender. The amount of the refinance should be equal to the payoff amount on your current car loan.

4

Fill out all additional paperwork to complete the refinance, including giving the new lender information about where to send the money to pay off your previous car loan.

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How to Buy a New Car Haggle-Free at the Lowest Price

Let your fingers do the shopping as you buy a new car haggle-free at the lowest price. Not to be outdone by the multitude of shopping sites online, car dealers not only offer their vehicles over the Internet but also give comparative prices. You may also go to a dealership that has a haggle-free policy if the dealership matches the price of the online quote. By investing some time in online research and securing advanced funding, the car-buying process can be more pleasant than the ones you may have experienced in the past.

Instructions

1

Secure the financing in advance. Speak to your credit union or bank about financing for the vehicle. Apply for a car loan by submitting the necessary documents.

2

Go to the dealership to look at the new cars. Drive the vehicle you want to see how it handles curves and how smooth the ride feels. Look at the added packages to determine which ones you want in your new car.

3

Search Edmunds and Kellybluebook websites for the base price of the new car you are interested in purchasing. Find the price of the packages and add these to the total new car price. Look for the "total market value" for your automobile, as this is the average price out-the-door that many consumers in your area are paying for the car.

4

Look for factory incentives or ones from the manufacturer by going to the manufacturer's website. Read reviews and ratings about the proposed vehicle from Edmunds or Kellybluebook. Find out about any potential problems with the car

5

Send out multiple quotes for the car. Request online quotes from all the car dealerships in your area. Include the packages, style, model and color of the car you want to buy.

6

Review the price offers you receive. Send another email to the most promising dealerships with the best offers and ask about rebates, factory incentives or manufacturer discounts you may be entitled to receive, if the dealership does not include them in the return email.

7

Read all offers and choose the best one. Send an email to either schedule an appointment to pick up your car at the physical location of the dealership or request the steps for an online purchase and delivery of the vehicle.

8

Arrive at the dealership location and head directly to the internet sales department. Sign all paperwork to purchase and transfer title. Hand over the bank check for the automobile. Drive off the lot in your new car.

9

Follow the steps for an online transaction according to the dealership procedure. Arrange for the car documents to be sent as an email attachment or complete the foms online. Confirm the method of payment as some dealerships may require you pay online while others may request the check upon delivery. Schedule the delivery time for the vehicle. Examine the car and confirm all packages are included before payment of the check.

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Who Pays My Car Loan If I Die?

Your estate is responsible for paying your debts after you die. The creditor to whom you owe the car loan has the right to pursue repayment of the loan even following your death. Unless you have insurance to cover the outstanding debt, state law will determine in what order your debts get paid from money in the estate.

Role of the Executor

The executor of your estate will have the responsibility of paying your unpaid debts. It is the executor's duty to notify your creditors that your will is being probated. State probate laws vary, but usually creditors have a fixed period of time to come forward. The lender or finance company must file during the probate process for the balance of the auto loan to be paid out of your estate. If there is not enough money in the estate, the debt will go unpaid.

Spousal Responsibility

If you live in a community property state, your spouse could be responsible for paying off your car loan debt. Community property states generally consider debt acquired by either spouse a community debt if it benefits the family as a whole. If that applies, your spouse would then be responsible for paying off the balance of the loan after your death. However, even in community property states the laws can differ. An attorney practicing in your state can explain a spouse's rights and responsibilities under the law. No matter in what state you reside, if you and your spouse are joint applicants on the car loan, your spouse will be responsible for any remaining debt when you die.

Other Survivors

Except for your spouse, surviving relatives are not legally responsible for repaying debts you incur in your name, according to a consumer alert published by the Federal Trade Commission. Depending on the state where your will is filed, even your spouse might not be responsible for settling your individual debt. If your estate is insolvent, which means there are not sufficient assets to pay your debts, the car loan lender would have no legal right to collect the debt. However, if a friend or family member co-signed the auto loan for you, that person becomes responsible for repaying the loan upon your death.

Repayment Options

If you don't want to leave the burden of paying off the debt to your liable spouse after you die, or have money that could go to your heirs removed from your estate, credit life insurance is a form of term life insurance especially designed to cover the amount of repaying a loan. The policy is in effect for a fixed period of time and cannot be renewed. This type of policy will not pay more than what you owe on the loan, but it is one way to assure the loan will be paid off if you die. You can buy a policy at the same time you take out the auto loan. The insurance premiums are added into your monthly auto loan payment.

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The Effects of Car Repossession

Nobody wants to get their car repossessed, but in some cases, people may find they have no other choice. Whatever the reason, when people stop making their car payments, the lender will come and repossess. The effects of car repossession are not only felt immediately by no longer having a vehicle, but for years down the road in regard to credit and interest rates on future loans.

Credit

A car repossession stays on your credit report for seven years. Not only do the late payments reflect on the list of accounts section of your credit report but also the repossession itself reports on the Public Records section. The damage to your credit score can range anywhere from a drop of 50 points to a whopping 150-point drop for a car repossession. The credit damage done will seriously affect your ability to get credit in the future.

Unpaid Balances

When a creditor repossesses a car, they often sell it at auction for a much lower price than what you owe on the loan. When this occurs, you are still responsible for the balance of the loan, called a deficiency balance. This amount can range for a few hundred dollars to thousands of dollars. If you cannot pay the balance off, the creditor can sue you for the amount. If a judge rules in the lender's favor, the lender can garnish your wages and/or your federal income tax refund.

Future Credit

If your credit score drops below 620, it will be extremely difficult to obtain new credit. If you are able to get a new credit card or loan in an attempt to begin rebuilding credit, expect to pay high interest rates. A drop in credit score due to car repossession affects other aspects of your life as well. For example, cell phone and utility companies may ask for deposits before opening an account for you and insurance companies may charge you higher rates based on your credit score.

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What Happens to a Car Loan When You Die?

Although your family members aren't typically liable for your debts after you die, that does not mean that debts you owe die with you. Your car loan is a secured debt, and your lender holds the title to the vehicle until the loan is paid off. Someone must assume responsibility for paying off your car loan when you die lest the lender will seize the vehicle.

Paying the Loan

When you die, the executor of your estate will inform your creditors of your death. All lenders' policies differ, but your family members must ultimately choose between assuming payments on the vehicle or surrendering it to the lender. If your family chooses to surrender the vehicle, the lender will sell it and keep the proceeds as payment for the loan. If you owed more on your car than it was worth, your lender cannot hold your loved ones responsible for the deficiency, but it can file a claim for payment with the probate court managing your estate.

Credit Insurance

When you finance a vehicle, you have the option to purchase credit insurance. Credit insurance pays off your loan should you die or become permanently disabled. If you carried credit insurance on your car loan, your family can file a claim with the insurance company for the remaining balance of your loan. The insurance company will then pay off your vehicle loan and the car becomes the property of the individual you specified in your will or your next of kin.

Potential Liability

In most cases, your family members are not liable for your car loan when you die. Exceptions exist, however, in community property states. If you live in a community property state, the lender can hold your spouse legally liable for assuming the payments on your car loan---even if the loan is in your name only.

The same is true for a friend or family member co-signed with you to help you qualify for the loan. By co-signing, your loved one signed an agreement with the lender to pay off your loan if you could not do so. In the event of your death, responsibility for payment would then fall to the co-signer.

Collection Activity

If your debts exceed your assets, you are considered insolvent and do not leave behind an estate that creditors can file claims against. Should this occur and your family chooses not to repay your car loan, the lender may hire a collection agency to collect any remaining loan deficiency from your loved ones after selling the vehicle.

While your loved ones may wish to pay off your auto loan debt for moral reasons, they are not legally obligated to do so and federal law prohibits debt collectors from threatening your family members with either legal action or credit damage should they neglect to pay off the loan's remaining balance.

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Can I Use Any Loan to Buy a Car?

If you are like most U.S. consumers, an auto loan is needed to finance a car purchase. You can use a variety of loan types to finance an auto purchase. Generally, if you are approved for any loan type that provides the money needed to complete the car purchase, you should be able to acquire the vehicle. Due diligence is recommended before buying a car to ensure a thorough understanding of the loan terms.

Secured Car Loans

A secured car loan gives your lender a security interest in the vehicle. During the time your loan is outstanding, your lender will be listed on the title of your car loan. Using the title to create a lien against your car, the lender can repossess your car if you default on the loan terms. Because secured loans give a bank some leverage against risk, you may obtain lower interest rates than on unsecured car loans.

Personal Loans

Personal loans may be used to buy the car you want. Using a personal loan, you can pay for the car with cash. Buying a car with cash may position you to negotiate on the purchase price, as auto dealers typically provide incentives on financing or the costs of a vehicle. Having your financing in-hand when entering a car dealership might compel the sales manager to make a deal before you leave the showroom. You can apply for a personal loan with your bank; however, personal loans are typically unsecured and more expensive than traditional auto loans.

Financial Institutions

Financial institutions largely facilitate the financing that consumers need to buy a car. Comparison-shopping car loans from local banks, credit unions or online resources, such as edmunds.com or carsdirect.com, could enable you to locate attractive auto loans. However, if you prefer a one-stop-shop approach, most car dealerships will help you arrange financing through a network of auto lenders. Generally, you will need to complete a credit application, list your wages and the name of your employer before receiving a loan decision.

Dealer Financing

Some car dealers provide in-house financing that enables buyers to pay the dealership directly. Buyers who have financial challenges or bad credit could benefit from dealer-provided financing. Typically, smaller car dealerships, "buy here-pay here," as well as mom-and-pop types of auto businesses offer flexible credit terms for car buyers. Generally, the financing terms are not as competitive as bank-provided auto financing. Direct car payments that are made on time to a dealership could position you to acquire a more competitive loan on your next car purchase.

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Can You Get Out of Your Smart Lease to Buy a New Vehicle?

GMAC Auto Financing (also known as Ally Bank) calls its vehicle lease program a "SmartLease." The same lease restrictions and termination options apply to this type of lease despite its different name. GMAC often offers lessees an opportunity to terminate their leases without penalty in the event the buyer leases or finances another vehicle through GMAC. You might also have other options.

GMAC's Pull-Ahead Program

GMAC offers a pull-ahead program, which may allow you to get out of your SmartLease up to one year early. To find out if your vehicle qualifies, call GMAC to inquire. Incentives and offers change monthly. If you have received notice from GMAC offering the opportunity to end your lease without penalty, the offer may change at the start of the next month. If your vehicle does qualify for the pull-ahead program, check the offer's expiration date. Pursue another lease or finance using GMAC again to end your lease without having to pay termination fees; over-mileage and wear-and-tear fees may still apply.

Lease Termination Option

Terminating your SmartLease is an option. Read your contract to review fees or call GMAC for cost details. Expect to pay all remaining monthly payments in addition to your termination fee. You will also lose any money you paid upfront. If you initiated a SmartLease Plus, in which you pay all lease payments at once, you can end your lease but you won't receive a refund. If you purchased extra mileage for your lease, your money will not be returned.

Dealer Trade

Even though you don't own your leased vehicle, you can trade your SmartLease vehicle to a dealership toward another purchase. GM dealers may offer special incentives for customer loyalty, meaning you can receive additional price discounts for remaining a GM customer. Your dealer will call GMAC to obtain the car's purchase price and appraise your vehicle. If you owe more than the vehicle is worth, you can shop for a car with rebates to cover negative equity or provide a down payment. Call other make dealers, as well. Some offer incentives for new customers who trade in a different brand.

SmartLease Transfer

You can transfer your lease to someone else. To do so, your account payments must be current. GMAC charges a lease transfer fee, which you can pay for yourself or transfer to your buyer. You can advertise your lease transfer in any classified advertisements or list the remainder of your lease on SwapaLease.com or the LeaseTrader website. Both websites advertise to a market of potential lessees. Be sure to check with GMAC to ensure your lease is eligible for transfer.

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What to Know About Automobile Financing

Getting approved for automobile financing can prove necessary when buying a new car -- especially if you don't have cash to pay for a car outright. Acquiring a good deal on an automobile financing package impacts the monthly payment on the car loan. Before meeting with a dealer, educate yourself on different financing options available to you.

Credit and Interest Rates

Getting the lowest possible payment on your new auto loan involves having a good credit score. A good score persuades auto financing companies to assign a low interest rate on the loan, and this single factor can have a huge impact on how much you spend each month. A good credit score includes a number within the 700 and higher range, says Experian.com. Improve your credit before applying for automobile financing by paying your bills on time and getting rid of credit card debts and other loans.

Auto Loan Term

Spreading out an auto loan term for 60 months will reduce the monthly payment on the loan. However, you will pay more money in interest over the life of the loan. Pay off an auto loan sooner and acquire a better finance rate by choosing a loan term that's less than five years. Compare the monthly payment for a three- or four-year car loan term to see if you can afford the higher payment. If so, consider a reduced loan term to eliminate the debt quicker.

Comparing Financing Deals

Talk with more than one bank when seeking automobile financing. Lenders vary, as do the interest rate on automobile loans. Finance companies working with the dealership may increase the rate for the bank and the dealership to make money. On the other, going directly to your personal bank and acquiring automobile financing may result in a cheaper rate because you eliminate compensating the middleman -- the dealership. Get a quote from the dealership's finance department, and then compare this information with quotes from other banks or credit unions.

Understanding the Loan Agreement

Do not agree to a car loan agreement without completely reading the document and understanding the terms of the agreement. Look at the final price for the vehicle, the loan term, the interest rate and the monthly payment. Ask questions if you're unclear. Agreements may include optional products financed into the loan amount such as gap insurance and extended warranties. Decline these products and have them taken off the agreement before signing. Once you sign the loan agreement, you're obligated to satisfy or make payments on the loan.

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Will an Overlimit Credit Card Hurt My Auto Financing?

If you've recently gone over the limit on one of your credit cards, odds are you're a little embarrassed, a little disappointed and a little unsure of how this will affect the rest of your life. Exceeding your card's limit can affect many areas of your life outside of that one particular credit card. Depending on your situation, one of those areas may be your auto financing.

Exceeding Credit Limits

If you find yourself exceeding your credit limit, it might be a sign of a bigger problem. Unless a big purchase sent you over your credit limit, it's likely that your balance was quite high before you exceeded your card's limit. The credit card company will likely charge you a fee and may increase your interest rate as a result of your purchases in excess of your credit limit.

Impact on Credit

The instance of you going over your credit limit in and of itself won't affect your credit. However, the fact that your balance exceeded your available credit is a bad sign. Both your balance and your available credit are indicated on your credit report, and your percentage of available credit used will be affected as a result. These factors may persuade creditors to believe that you're a high risk for credit and can therefore decrease your credit worthiness.

Existing Auto Financing

Going over your credit limit may affect your auto financing, depending on what kind of auto loan you have. If your auto loan is a fixed rate loan, the instance will have no bearing on the future of the actual loan, as your interest rate cannot be changed over the life of your loan. However, you may find it more difficult to make your monthly payment if your card has been hit with an over-the-limit fee and an interest rate increase. If you have a variable rate auto loan, you may see an increase in your interest rate if your credit score has decreased, something that depends largely on whether your exceeding the limit was a one-time mistake or a consequence of over-reliance on credit.

Future Auto Financing

If you're looking to purchase a new vehicle, exceeding your credit limit can have a more profound impact. While your ratio of credit used to available credit is just one part of your credit score, it's a pretty hefty portion that comprises 30 percent of your overall score. A creditor may determine that your balance is too close to your credit limit, even if you've managed to get the balance under the limit, and either decline to extend you credit or charge you a high interest rate.

CARD Reform

Fortunately, exceeding your credit card's limit used to be a much easier thing to do than it is today. Before the Credit Card Act went into effect in 2009, you could spend as much as you wanted to and just get hit with an over-the-limit fee. Today, you have to opt-in to be able to exceed your credit limit. If you choose not to opt-in, you won't be able to go over your limit; any charge that would have sent your card past its limit will simply be declined. This can help you to protect the interest rate on a variable rate auto loan or any auto financing you may seek in the future.

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What Do You Need to Know About Buying a Car?

There's nothing quite as intoxicating as the smell of a new car. It invites you to sit inside and go for a quick spin around the block. That being said, buying a vehicle is a big undertaking that will typically result in years of debt payments. It's important to approach the venture much like an investment. Asking a few simple questions at the beginning of the process can save you a lot of money as the years go by.

Can You Afford It?

This question is not as straightforward as it may seem. Not only should the car payments and insurance be included in the monthly expense calculation, but you should also allot for fuel consumption and maintenance. Another consideration for most newer cars is the purchase of an extended warranty. Typically, these will cost around $2,000, depending on the model of car purchased, and can be added to the financed payment. They cover the vehicle up to 100,000 miles from bumper to bumper. While not a necessity, these extra coverages often pay for themselves and can save the owner considerable amounts of money.

What Is Your Trade-in Really Worth?

It may be the best car you've ever owned, but to the dealer, it's just another used car. Do your homework ahead of time. Know the vehicle's history and any defects. Make sure the vehicle is clean of all clutter. Most importantly, bring documentation to prove its value.

Negotiate the trade-in price and the sales price of the new car separately. Salesmen will often try to confuse buyers by combining the two prices together. With lots of numbers flying around the buyer can easily get lost. Slow down. First negotiate a price for the new vehicle that you are comfortable with. Then after the new car price is settled, begin to negotiate the trade-in price. This tactic can save thousands of dollars.

How Safe Is The Car?

Every auto manufacturer on the planet claims they have the safest cars around. It's important to do some research on these claims. The safety features vary by manufacture year. Sometimes new features can be added in the middle of a manufacture year as car makers work out the bugs in the upcoming models. Ask about the number and location of airbags. Does the vehicle have rear parking assist or special driver alert devices? Lastly, does the vehicle have an integrated hands-free mobile device?

Does the Car Meet Your Needs?

Unfortunately, not all vehicles meet the needs of all people. While you may think the latest Camero is the best-looking car on the road today, it probably won't meet your needs for a family car. Likewise, a minivan won't work well on a construction site. It's important to be realistic about what your needs for the vehicle will be. Is space an issue? Will you be taking long trips? Will you use the vehicle to transport large items? Be realistic about your needs and be very wary of salesmen who might try to talk you into a vehicle that doesn't match those needs.

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Financing Options for Cars

A variety of lenders finance car purchases. Depending on your credit and whether you purchase a new or used car, you may benefit from pursuing a loan that targets your type of purchase and credit history. To determine where to apply for your loan, consider the different types of lenders available and which best suits your needs.

Manufacturer Financing

Manufacturer banks may offer a lower rate than traditional lenders if you purchase a new car, sometimes as low as zero percent. You can find rate incentives and term requirements advertised at the manufacturer website. Low rates are usually available in lieu of available rebates. Manufacturer banks include lenders such as Volkswagen credit for Volkswagen, BMW Financial Services for BMW or Mazda American Credit for Mazda vehicles. While these banks also offer financing for used cars, rates are not often as competitive as local lenders.

Traditional Financing

Traditional financing includes lenders such as local credit unions or national banks with local presence, such as HSBC, Chase or Wells Fargo. Traditional lenders often compete with one another, but may have different lending requirements or restrictions. Most loans are offered for a period of 24 to 72 months, but some banks may offer a longer term. New car interest rates are often advertised on bank websites; you may have to call the lender to obtain used car rate information. Using a local bank for your loan may offer additional incentives, such as a rate discount for maintaining a checking account.

Subprime Financing

Subprime lenders offer loans to buyers with poor credit. Subprime banks do not offer competitive rates or terms, as this type of lender is often a last resort for poor credit borrowers. You may have subprime lenders in your area but can apply to national based lenders without local presence, such as Road Loans, Capital One Finance or AmeriCredit. Rates for subprime loans can be as high as 29 percent, depending on your state's maximum allowed rate. Approval terms are often shorter and down payment requirements usually higher than other lenders, which can significantly increase your monthly car payment.

Dealership Financing

Large dealerships offer a variety of lending options. Dealers use the same banks you can find on your own. Dealerships can submit your credit application electronically to a variety of banks quickly. Many dealers also work with local credit unions. Depending on the bank the dealer uses, it may allow the dealer to increase your interest rate by as much as 3 percent for dealer profit. You can negotiate your interest rate with a dealer. Dealers also handle and submit all bank contracts, allowing you to complete your car purchase in one place.

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What Information Do I Need to Apply for an Auto Loan?

To apply for an auto loan, you must submit detailed information about yourself and your finances to a lender. Lenders view your credit history, income and debt information to determine your lending limits and whether or not to extend you a loan. Have your information in order before you apply; you may have to do some research to provide the application information.

Personal Information

A potential lender requires your name, address, date of birth and Social Security or tax identification number to access your credit report. The bank uses the credit report to view your credit score, current debt, payment history and length of credit. Some banks may require additional information after viewing the report, such as a copy of your social security card or proof of satisfied bills. The lender does not determine your loan based on your credit score alone; it also considers various pieces of your credit information.

Employment and Housing Information

The credit application requires you to provide your employer information, including name, address and a contact phone number so it can verify your length of employment and income. Expect to provide your gross annual income and your most recent pay stub, which states your year-to-date income. Homeowners likely must provide a monthly mortgage payment amount and the mortgage company's name and phone number. Renters must provide a rental contact and rent payment amount. Prepare to provide at least two years' worth of employment and address information.

Vehicle Information

If you are applying for a loan outside of a dealership, you must provide information about the vehicle you want to purchase. You must provide the car's year, make, model, vehicle identification number, level and additional vehicle feature information to the bank. The bank uses the information determine the vehicle's value and your loan amount. Find out if the vehicle has any extra features, such as alloy wheels, leather, a sunroof, side-steps or other options that increase the vehicle's value.

Warning

If you apply for a loan through a dealer, it may electronically submit your loan to several banks at once. Expect letters from different banks regarding your credit application, but don't be alarmed. A dealership tries to obtain the best possible rate for you by submitting your application to several banks. Unless you want to use one specific bank, talk to your dealer about rate and bank options, multiple credit inquiries and your concerns before applying.

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How to Give a Vehicle Back to the Bank

You're free to drive your car as you please, customize it to your specifications, and it's you who pays for the vehicle's gasoline, but until you make the final payment to your auto lender, you don't own your car free and clear. The lender's lien against the vehicle gives it the right to repossess your car if you start missing payments. The lender then sells the car in an effort to minimize its losses.



Losing your car to repossession, however, doesn't mean your dealings with the lender are over for good. If your lender has to repossess your car, it will charge you both repossession and towing charges. When a repossession becomes imminent, returning your vehicle to the bank yourself via a process known as voluntary repossession lowers the fees you'll face after the transaction is complete.

Instructions

1

Call the bank that holds your auto loan. Explain that you can no longer afford the loan and would like to return the car voluntarily. Schedule a time and place to drop off the car.

2

Ask for a supervisor if you know you owe more on the loan than the car is worth. Ask the supervisor to reduce or waive any deficiency on the car in exchange for you returning the car voluntarily. The deficiency is the difference between the loan balance and the car's sale price. Not all banks will negotiate a vehicle's deficiency, even when you give the car back voluntarily, but some do.

3

Ask a loved one to follow you to the designated drop-off location in his vehicle. This provides you with a way home after returning your car to the bank.

4

Drop off your car as agreed. Give the lender the keys and registration paperwork. Sign any documents the lender presents noting that you relinquished the vehicle voluntarily.

5

Ask for a written statement from the bank proving that you returned the loan's collateral in lieu of paying off the loan. Put the documentation in a safe place. This receipt protects you in the event your lender makes an error and either claims you did not relinquish the car or that you owe repossession and towing fees.

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Insurance Advantages for Financing a Car Instead of Paying Cash

It is fairly common knowledge that a car is a depreciating asset. For this reason, some car shoppers opt to avoid financing vehicles and paying significantly more for them by the time loans are paid in full. However, paying cash for a vehicle is sometimes not possible, especially for late or new models, which can come with prices in the $20,000-or-more range. Financing, therefore, is a must for cash-strapped shoppers and can come with advantages.

Little or No Down Payment Programs

Securing a car loan is a way to own a car without investing large amounts of cash, especially for those on a budget. Many car loans are available with attractive interest rates and little or no down payment requirements. For those who have little or no savings, it becomes possible to build cash reserves while making affordable monthly car payments.

Low Interest Rates

Especially during times when dealers need to move inventory, interest rates on vehicle loans can be as low as zero percent. For this reason, it is often better to keep cash reserves in an interest-bearing savings account rather than tie it up to finance a depreciating asset like a car.

Tax Advantages

The Internal Revenue Service allows income tax filers deductions for expenses and vehicle usage on cars used for business. Some leases and loan interest can also be tax deductible. This often means that a portion of monthly payments can be returned in the forms of tax refunds, which can be used to reduce loan amounts or be invested elsewhere.

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Selling Used Car and Liens

If you have a lien listed on your car's title -- signifying an auto loan provider has financial interest in the vehicle -- you probably can't transfer ownership to a seller. Very few states allow title transfers when a lien is listed on the title. Remove the lien from the title before you sell the car or obtain a proper lien release to give to the seller.

Lien Release

Obtain an original lien release from the title's listed lien holder. This document is an official letter from your lender; it lists the vehicle's information, such as year, make, model and identification number, as well as the date the loan was satisfied. The letter is printed on bank letterhead and signed in ink by a lender representative. This letter, when supplied with the title, releases the lien. If you don't have the letter and have paid off your loan, contact your lender to receive another. If you are using the vehicle's sales price to satisfy the loan, your lender will give you a lien release once you make your payment.

Applying for a Clear Title

Some states hold titles. If you live in one of these states, your title was sent to your lender instead of you. You'll have to pay off your loan to receive the title before you can transfer ownership. If you have already paid off your loan but didn't receive the title, apply for a duplicate at a state motor vehicle office. Some states offer a spot for the lien holder to sign once the lien is satisfied; look on the front of your title to see if a spot exists. If so, you do not need to apply for a new title. If the title is signed by the lien holder, it will be removed when the buyer titles the vehicle.

State Rules

Very few states allow title transfers when a lien holder is listed on the title. Even if the lien is satisfied, you must still provide a lien release to apply for a clear title or to provide to the buyer so he can transfer the title to himself. Without the necessary release of lien, the buyer won't be able to transfer ownership. To determine the rules of your state, call your state's motor vehicle department to find out about the title transfer and lien release process.

Risks and Selling Issues

Even if you determine that you can transfer your title with a lien present, you should still obtain a proper lien release or clear title before selling the vehicle. Many buyers are careful not to purchase a car with a lien, as it signifies that an auto loan hasn't been paid off. If a buyer agrees to purchase your vehicle without proof of lien release, the vehicle may be repossessed if you fail to pay your lender. Avoid any issues with your seller by having all title transfer paperwork ready.

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Ten Things to Know Before You Lease a Car

The next time you see a car you love in the showroom but can't afford the sticker price, ask the salesperson about the dealerships leasing programs. Leasing is not for everyone, but it is a way to drive off with a new car every few years for a cheaper monthly payment. If you're not familiar with how a lease works, there are several distinctions between a lease and a purchase.

The Leasing Option

If you don't keep a car for more than two or three years and want a smaller monthly payment, a lease may be right for you. You won't own a car at the end of the term, but you also won't have to deal with high maintenance costs since most cars are under warranty for the lease term.

Cheaper Cost to Drive

A lease payment is generally 30 to 50 percent lower than the monthly cost of buying a new car. But if you purchase the car after the lease is up, the car will be more expensive over the long run.

Mileage Allowance

Most leases allow for 12,000 to 15,000 miles driven each year of the term. If you exceed this allowance, penalties will apply.

Insurance May Be Higher

Drivers who lease must typically carry a higher level of automobile insurance since the car belongs to the leasing company. It's common to carry $100,000 per person or $300,000 per occurrence for liability and $50,000 for property liability insurance when leasing a car.

Residual Price

The estimated value of the car at the end of the lease period is called the residual price. The longer you have the car, the lower the residual value, when compared to the original manufacturer's sticker price.

Other Leasing Fees

There may be an acquisition fee to take delivery of your lease. This fee is a flat rate paid to the leasing company or lender, and can run several hundred dollars, according to Gerri Willis of CNN Money. At the end of the term, you may also pay a disposition fee if you decide not to keep the car.

Wear and Tear

You are allowed certain wear and tear on the vehicle. But you are responsible for excessive wear and tear determined by the leasing company or damages to the car while it's in your possession.

No Cooling Off Period

Before you sign a lease, be certain that it is the car you want to drive for the next few years, and the monthly payment is something you can afford. A lease is a binding contract. Once you sign the paperwork and drive off the lot, there is no cooling off period. You cannot turn the car in if you have a change of heart the next day.

Early Termination Fees

If you turn the car in before the lease term ends, you are responsible for fees. This could include the balance of the remaining lease payments. This includes if the car is stolen and not recovered or wrecked in an accident.

Gap Insurance

If your lease ends early for involuntary reasons such as theft or an accident you still owe the balance due on the lease. Many insurance companies will not cover the full cost of the lease; therefore, obtain gap insurance to protect you for the difference your insurance doesn't pay.

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How to Remove Your Ex Spouse's Name Off Your Car Loan

If you and your ex-spouse applied together for a car loan, you're both legally liable for making the payments. Your divorce, and the subsequent divorce decree, does not absolve your joint obligation to your lender. As long as the account remains in both names, any payments made will appear on both credit reports, and the lender retains the legal right to pursue both of you for missed payments.



Because removing your ex-spouse's name from your car loan may prove difficult, doing so prior to divorce is preferable to waiting until the divorce is final. If your divorce has already been finalized, however, you still have some options for removing your ex-spouse from your vehicle's loan paperwork.

Instructions

1

Contact your lender and request novation of the loan. Through novation the bank agrees to modify the terms of your original contract. Request that the car loan be transferred into your name only. Your lender will request that you submit copies of various financial documents proving that you can afford the monthly payments on your own. You will also need to submit a copy of the divorce decree granting you full ownership of the vehicle. The exact documentation necessary for novation of the loan will vary depending on the lender.

2

Refinance the vehicle. By refinancing the car, you are taking out a new loan to pay off the current loan. Provided you take out the new loan on your own, your ex-spouse's name will no longer appear within the loan paperwork, and you will take over full responsibility for making payments. Refinancing is only possible if the value of the car exceeds the amount you still owe on the current loan.

3

Take out a personal loan to pay off the car if you owe more on the vehicle than it is currently worth. Unlike a refinance loan, a personal loan isn't tied directly to the vehicle. Thus, the vehicle's value isn't a factor in determining whether or not you qualify. Personal loans typically carry stricter credit and income requirements than refinance loans.

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How to Make an Agreement on Taking Over Car Payments

Typically, it is best if the person purchasing your car obtains his own financing for the vehicle. However, if the buyer cannot qualify for a loan and you still wish to sell him the car, you can work out an arrangement where he takes over your car payments and the loan remains in your name. Written documentation of the agreement is essential to your legal protection if the car is in an accident. However, you remain liable to your lender for the balance owed if the buyer does not make his payments.

Instructions

1

Contact your lender to make sure that you can allow someone to take over your payments. If your lender forbids this, the purchaser must make his own arrangements to finance the car.

2

Make a copy of the purchaser's identification to reference when making the contract.

3

Include both of your names at the top of the contract and write your addresses. Explain the details of your agreement. For example, include the payment terms and that you will transfer the title to the car to the buyer after he pays the balance owed on the loan. Payment terms should include the amount required monthly and whether the purchaser is to send the payment to you or the lender.

4

List the repercussions to the buyer if he does not fulfill the terms of the agreement and who is responsible for repairs and insurance coverage. Since the loan is remaining in your name, you must retain insurance coverage for yourself and add the purchaser as a driver of the car. State in the contract that the purchaser is responsible for premiums and will receive any amount over the balance in the event of an insurance payoff.

5

Ask a notary public to witness both signatures and attach her seal to the agreement.

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How to Purchase a Used Car With Poor Credit

Auto financing is one of the easier loans to get with bad credit. This is because car loans are secured debt, debt where the bank can seize something you own (the car) if you default on payments. You won't necessarily get the best interest rates or be able to afford the nicest car, but getting financing shouldn't be a problem.

Instructions

1

Look at your personal finances, including major regular expenses such as rent and your usual monthly income. Decide on a monthly car payment of no more than one quarter your income after expenses.

2

Check your credit history. Each of the three major credit bureaus will provide you with one free copy of your credit report every year. You can contact them directly or use one of several inexpensive Internet credit check services.

3

Save a down payment of at least $500, unless you plan to trade in a car worth that much or more.

4

Resolve any major outstanding actions on your credit report. Don't worry too much about late payments, but do pay off any collections actions. Get a letter stating you've done so each time you send a check.

5

Go to a car dealer near the end of the month, when quotas and bonus structures make the sales staff hungry. Also consider any "sales events". The sales team is often competing for an extra bonus or is otherwise motivated to help you buy a car.

6

Choose a car that will fit the budget you've decided on. Negotiate a deal with the sales staff, factoring in your down payment. Don't buy too inexpensive a car: cars worth too little don't represent enough interest income to justify the risk of an auto loan.

7

Let the sales staff do the heavy lifting when it comes to getting you approved for a loan. If they can't find a lender, then they don't get paid for the sale.

8

Arrange for a co-signer if your credit is too bad to get the loan on your own.

9

Sign documents on the loan and drive away in your new car. Make your payments on time every month to build credit.

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What Is a Guaranteed Auto Loan?

Some people consider having a car a necessity. If you have a poor credit history, you may not be able to buy any car you want. However, many dealers offer guaranteed auto loans. Understanding how these loans work is essential before committing yourself to anything.

Guaranteed Auto Loans

A guaranteed auto loan is extended by an auto dealer to its customers. In most cases, the auto dealer deals with used cars. With this type of loan, you can get approved for financing, regardless of your credit history. You could have a recent bankruptcy, foreclosure or some other kind of blemish on your credit report and still get approved. This allows practically anyone to be approved for a car loan.

Requirements

With a guaranteed auto loan, the dealer will not look at your credit history. While your credit may not be important, the dealer will want to see that you have an adequate amount of income to make your payments. Most of these dealers require you to make a weekly payment, and the dealer will require a certain amount of income, depending on how big of a loan you are taking out. You have to prove that you are employed and make a certain amount of money to qualify.

How These Work

The idea of guaranteeing an auto loan to anyone might seem like it does not make much business sense. In reality, car dealers know that a certain number of these loans will go into default and they will have to repossess the cars. To compensate for these few bad customers, the dealer charges everyone a much higher interest rate.

Down Payment

Many guaranteed auto loans also come with a significant down payment requirement. By requiring a down payment, the lender can lower the risk associated with default. If customers have a large amount of cash in a car, they are much less likely to stop making payments and lose it. The lender might require you to come up with at least 20 percent before you can qualify for a loan.

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What Happens If I Refinance My Vehicle?

The process for refinancing an auto loan is similar to taking out the original loan. A lender will check the borrower's credit rating and income, just as lenders do when borrowers take out other loans. You should consider whether refinancing an auto loan is worth the effort by determining whether you would gain any significant benefits from the refinanced loan.

Process

People who refinance their cars are taking on a new loan. The lender who approved the refinancing will pay off the balance on the old loan and issue a new one which includes the payoff amount for the old loan, along with any refinancing fees. The refinanced loan may come from the company that issued the original loan, or it can come from a different company. You may want to refinance a loan to lower the monthly payments on your vehicle. You can get lower payments if the new loan has a lower interest rate, or if the lender extends the amount of time you have to repay the loan.

Lower Rates

You may be able to get a lower interest rate on a refinanced auto loan if your credit score has improved since you took out the original loan. You also may be able to get a lower rate if interest rates in the auto industry have dropped since you took out the original loan. Yet, the Lease Guide auto website notes that the interest rate on a refinanced loan may be higher if an auto dealer gave you a special low rate to seal the deal when you bought your vehicle. In such cases, refinancing won't save you any money over the life of the loan.

Loan Extension

It costs borrowers more to extend the amount of time they have to repay an auto loan through refinancing, because they pay interest on the loan for a longer period. However, people who are struggling to make their car payments may need to assume the added costs to get more affordable payments. Extending the loan term usually lowers monthly payment amounts. Nonetheless, the value of the vehicle is important for people who sell or trade in their vehicles shortly after extending their loan period, because they may be "upside-down" in the loan.

Upside-Down Loans

Borrowers are upside-down in an auto loan when the balance owed on a loan exceeds the value of the vehicle. Auto values generally drop quickly after a vehicle is purchased, so extending a loan period through refinancing often leaves the borrower owing more on a vehicle than it's worth. An upside-down loan isn't an issue for people who intend to keep a car and pay off whatever they owe, regardless of its value. However, borrowers who try to sell their vehicles or trade them in at a dealership usually come up short in an upside-down loan, because the sale or trade-in offer is often less than the loan balance. In such cases, borrowers need to pay off the remaining balance themselves.

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How to Transfer a Car Loan to Another Person

You can't simply transfer your loan to another person. Instead, the person who wants to take over your car payments must either apply for your loan's payoff amount alone or with you as a cosigner if he can't obtain approval. Lenders base loan interest rates and terms on individual credit history, income and debt. Also, most states require that a new owner pay taxes on a vehicle purchase. The person to whom you want to transfer your car payments may apply to your current lender or to another lender of his choice. You must satisfy your current car loan to transfer vehicle ownership.

Instructions

1

Call your lender to obtain your loan's payoff amount. Ask for the loan's per-diem, which is the cost of interest added daily to your payoff and are charges you must pay to transfer ownership. Unless you pay a zero-percent interest rate, expect your payoff amount to change every day.

2

Ask your lender to describe its payoff process. Find out whether you have to go to your lender to make your payment or whether you must submit funds by mail. To have your buyer pay your lender directly, note your account with a lending representative to allow your buyer to obtain payoff information and make payment.

3

Provide your buyer with the loan's payoff amount. Your buyer can apply to the same lender to simplify the transfer process or apply to a lender of his choice. Provide the buyer with your lender's phone number, your account number and your vehicle information, such as year, make, model and vehicle identification number (VIN).

4

Wait for your buyer to complete her payment to your lender if she applied for a loan elsewhere or, if she applied to your lender, wait for your lender to complete the loan transfer process. Sign your vehicle's title or ownership release paperwork, which varies depending on your state and lender's requirements. If your lender mails you the paperwork, sign and send back your paperwork promptly.

5

Take your license plates off of your vehicle before giving the vehicle to the new owner. Cancel your insurance policy quickly to avoid paying extra insurance costs. Return your plates to a local motor vehicles office if your state requires it.

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When Can a Car Be Repossessed in South Carolina?

State laws establish the rights consumers have when their default on their vehicle loans. As collateral for a loan, the borrower of a car loan gives her lender a right to repossess her vehicle if she defaults on her loan. In South Carolina, before a lender can repossess or reclaim its property, it must provide the borrower with advance notice and a right to cure her deficiency before it can proceed with repossession.

Notice

Title 37 of the South Carolina Code establishes when a lender can repossess a vehicle. Lenders must provide defaulting borrowers with a "Notice of Right to Cure" their loan defaults before proceeding with repossession. Under South Carolina law, a borrower is not in default of his loan obligations until he is at least 10 days behind in his payments. Additionally, the notice must give a borrower at least 20 days to cure his delinquency or default. However, federal credit unions do not have to provide this cure opportunity.

Right to Cure

South Carolina does not require lenders to provide car buyers with more than one "Notice of Right to Cure." If a car buyer defaults on her loan more than once, the lender is not required to give her a subsequent notice. Thus, the lender can proceed with repossession without giving the borrower a right to cure after the second missed payment.

Lenders' Rights

Lenders can repossess their vehicles by filing a self-help lawsuit after completing a "Claim and Delivery" notice or by towing defaulting borrowers' vehicles. A lender can hire a repossession agency to conduct the repossession or the lender can conduct it. However, lenders and repossession agencies must comply with the existing South Carolina laws, which state that as long they abide by the state's peace laws by not breaching the peace, they may repossess vehicles on the borrower's private property or at their place of business if contracts provide them with these rights. Lenders have a right to sue car buyers for the remaining deficiency or the difference between the sale amount and the outstanding loan amount, if they sell repossessed vehicles.

Borrowers' Rights

In South Carolina, borrowers have a right of redemption to redeem their vehicles. Lenders must send borrowers with a written "Right to Redeem" notice after the repossession. The notice must outline the lender's intentions to sell or auction the repossessed vehicle. Buyers may have up to two weeks to pay their delinquency and keep their vehicles. Under South Carolina law, borrowers who have paid at least 60 percent of their loans can demand a sale within 90 days of repossession. Any proceeds after the loan is paid must then be returned to the car buyer.

Considerations

Since state laws can frequently change, do not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your state.

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Can a Car Be Repossessed for Failure to Pay Insurance?

To determine if your lender can repossess your vehicle for failing to maintain an insurance policy, read your loan contract. Maintaining full-coverage insurance is an auto loan requirement, but lenders differ on penalty actions. Some lenders may choose to automatically add an insurance policy to your loan account, which raises your loan payment.

Lender Penalties

Your lender's penalty for not maintaining insurance is stated in your loan contract. Your lender may repossess the vehicle or choose to add its own insurance coverage. If your lender adds its own coverage, expect an increase in your monthly loan payment. Lender-provided insurance policies protect only the vehicle in the event of a loss. The coverage is more expensive than you can obtain on your own and does not meet state required coverage requirements. You may face penalty fees from your state for lack of liability insurance if your car remains on the road.

Insurance Notification

Your insurance company notifies your state and lender of any insurance changes. If you let your insurance lapse, cancel or change your coverage, both your state and lender will find out. Both your lender and your state motor vehicle department are likely to offer you a grace period, allowing you several days or more to correct the insurance issue or provide proof of coverage if a mistake was made. Correct the issue as soon as possible to avoid defaulting on your loan contract.

Correspondence

Your lender is unlikely to send out a repossession company to seize your vehicle without notifying you. Expect to receive phone calls and mail from your lender about your insurance issue. If you avoid your lender, it will start the repossession process if your loan contract states that repossession is a penalty. If the lender increases your car payment because of a policy it had to purchase, you'll receive a bill that reflects your new car payment amount. You must pay your new loan payment amount to avoid loan non-payment issues.

Repossession

If your lender repossesses your vehicle, it will significantly damage your credit. You may have the opportunity to purchase your vehicle back from your lender, but the repossession will remain on your credit report for at least seven years. If you do not get your vehicle back, your lender will sell it instead. If the vehicle is sold for less than your loan payoff amount, you must pay the balance due. Avoid repossession issues by talking to your lender and purchasing the correct insurance coverage.

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How to Finance a Used Car in Los Angeles, California

If you need to buy a used car in Los Angeles, California, you do not need to save up all the cash for the purchase. Regardless of where you are purchasing your vehicle, you can attain financing from a local or national financial institution. Before applying for financing, you can check the average interest rate for used-car loans in your zip code on Bankrate.com. Doing this allows you to recognize a good financing offer from a bad one.

Instructions

1

Fill out a finance application with the car dealership, if you are purchasing from a dealer and want to finance through them. Some dealers, such as Longo Toyota, have online applications, which you can fill out before visiting the car lot. Otherwise, you can ask to complete the application in-person. The application is a standard credit application, which asks for your income information.

2

Visit a local bank, or the bank website, to apply for a used-car loan. Some Los Angeles area banks that offer used-car financing include Los Angeles National Bank, University Credit Union and Pacific Resource Credit Union. The loan application asks the same questions about your income as the car dealer finance application.

3

Use a multi-quote service, such as Lending Tree or Up 2 Drive, to submit your financing application and get offers from up to four national and local Los Angeles banks. You can compare the loan offers and choose the best interest rate and terms for your purchase.

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How to Keep a Leased Car After the Lease Expires

Just like a favorite t-shirt or old pair of tennis shoes, a leased car can be difficult to get rid of. After all, they are comfortable, worn in and contain memories. But there is no requirement you discard the car. Options exist to keep a leased car after the lease expires. Rather than break in a new car, explore these options to keep your leased car.

Instructions

1

Read your lease contract. Find the clause that contains the residual payment if you decide to keep the car. Write down the amount due.

2

Learn the true value of the car. Navigate to the Kellybluebook or Edmunds website to find the car's value. Click on "used cars," and find your make, model and year. Input mileage and condition to get the current value.

3

Compare the car's value to the residual amount. Prepare to negotiate the residual value if the true value is less. Print the copies of vehicle's value from the website and have them on hand as needed.

4

Contact your lender. Inform him you are interested in purchasing the car once the lease expires. Ask for the purchase price.

5

Negotiate the price downward if he quotes you the residual price. Advise the lender that the residual price is inflated compared to the current retail value. Explain you would like to finance the new purchase through the lender, but the price will need to be reduced. Accept the new price if offered.

6

Go to the dealership where you purchased the vehicle. Ask for the person in charge of purchasing expired leases. Ask the representative about a discount on the residual price and show him the computer printouts of the current retail value. Request a lower price on the car.

7

Stand firm. Be prepared to walk away if the residual value is substantially higher than the current value. Purchase the car at any time in the negotiations when it reaches your price point.

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How to Buy a Car as a Married Couple

Buying a car as a married couple and putting both names on the auto loan can increase purchasing power. This is because lenders factor in both incomes when determining an affordable amount. But before you can obtain a joint auto loan, you must provide your lender with specific information to determine if you qualify for financing.

Instructions

1

Include both names on the auto loan application. Listing one person's name makes this individual solely responsible for the car loan. If applying as a married couple, submit both legal names. With a joint auto loan, both parties are equally liable for the financial debt.

2

Give the lender copies of both income statements. Lenders vary in how they verify your income. Some will ask for copies of your most recent paycheck, while others may contact employers to verify income and employment record.

3

List your Social Security numbers and give lenders permission to check both credit reports. Both credit scores and histories play a role in the approval process. Lenders check both reports for delinquencies or other problems, such as charge-offs and collection accounts. Lenders also use the average of both credit scores to determine the interest rate on the auto loan, if approved.

4

Sign the auto loan and title information at the dealership. The joint auto loan purchase is complete once both married parties sign their names to the loan documentations and title documents. The title outlines ownership of the vehicle. The lender keeps the title until borrowers pay off the debt.

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No Money Down in Car Buying

People who buy new cars without making a down payment can get themselves into financial problems as the value of their vehicles drops. Car shoppers usually consider whether they can afford the monthly payments on an auto loan. However, they also should consider whether the lack of a down payment will leave them owing more on their cars than they're worth.

Costly Deal

It may seem ironic, but no-money-down deals can be the worst car deals for people on tight budgets to make. Consumers' monthly payments are automatically higher when they don't make a down payment on a vehicle. People who make the traditional 20 percent down payment essentially are paying off the immediate decline in value that's expected for most new cars the first year after they're purchased.

The Edmunds auto information website says that a down payment also helps keep buyers from being "upside down" in their loans. People are upside down in a loan when they owe more to their auto lenders than their cars are worth.

Interest Charges

Some people stretch out their loan payments over several years to make a no-money-down car deal affordable. Auto loans are usually in effect for four or five years. However, some lenders will extend auto loans to as long as seven years to give borrowers lower monthly payments, which they can afford. Yet longer loan periods raise the cost of the vehicle because the borrower ends up paying interest charges over seven years instead of four or five years.

Trade-in Value

Consumers who owe more on their vehicles than they're worth because of a previous no-money-down deal can't use the trade-in value for their cars solely as a down payment on a new car. Instead they have to pay off the loan on their old vehicle as well as finance the purchase of the new vehicle.

Rolling the remaining balance on the old loan into a new loan to pay for a new vehicle can be another bad deal that leads to an upside down loan situation. That's because the borrower will be paying more in interest on a larger loan amount and still paying for a vehicle he no longer owns.

Considerations

A Bankrate.com article, "In a Hole With an Upside-Down Auto Loan" recommends that car buyers avoid no-money-down offers and put at least 20 percent down on any vehicle they purchase. Furthermore, the article says consumers should take on the highest monthly payment and shortest financing terms for their vehicles that they can afford. That means car buyers should limit the life of their auto loans to four years or fewer if they can afford to make the monthly payments under the loan terms.

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How to Do Name Changes on Car Titles

When cars are bought from dealers, each dealer must prepare the titles and forward this information to the finance company. The finance company retains the title until the borrower pays off the balance. Upon selling the car to a new owner, the original owner must change the name on the title to transfer ownership to the buyer.

Instructions

1

Refer to the back of the car title and look for the section that pertains to ownership transfers.

2

Sign your name as the seller. Doing so indicates your willingness to transfer the title. Include the date and list the odometer reading.

3

List the sale price of the car. If selling the vehicle, include the purchase price on the back of the car title. Use a Bill of Sale or a Supplemental Information for Procurement of Title if there isn't adequate space on the title.

4

Ask the buyer to sign his name to the back of the car title indicating he is the new owner.

5

Submit the new title to your state's department of motor vehicles, DMV. Once you and the new car owner sign and date the title, the new owner must present the document to DMV, register the vehicle in his name and pay sales tax.

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How to Calculate Your Car Note

Before you go car shopping, you should determine how much car you can afford. Achieving a monthly payment that works in your budget is a car-shopper's goal, and understanding your spending limits before shopping will save you from falling in love with an automobile you can't afford. The basic principle of calculating interest on loans is to multiply the principle amount of the loan times interest rate times the number of months financed, but in reality, all sort of nuances come into play with an actual loan calculation.

Instructions

1

Pull your credit score to determine if you will qualify for the best interest rates.

2

Check interest rates online to determine what the going rate is for new and used cars, depending on which you are interested in buying. If you have narrowed your car selection down to a brand model, then see if the dealership is offering special financing rates for which you qualify.

3

Perform an Internet search for "car loan calculator." The search will return several selections of free online calculators that will convert loan information into monthly payments.

4

Enter the estimated cost of the car and any other costs you intend to roll into the loan.

5

Enter the interest rate you expect to gain on the loan.

6

Enter a term for the loan based on how long you wish to finance the car.

7

Submit the information and the calculator will return a monthly estimated car payment to you.

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Do Repossessed Cars Affect Credit?

Your payment history and lines of credit, such as car loans or credit cards, are reported to the credit bureaus and affect your credit score. Late payments occurring before repossession are reported to the credit bureaus and reduce your credit score. A repossession, once reported to the credit bureaus, quickly decreases your credit score and increases your lending risk.

Late Payments and Repossession

Your credit report shows the amount you owe toward your car loan, the number of payments you've made and the number of days your payment was late. After repossession, your credit score decreases by at least 100 points or more. Repossession affects each individual's credit score differently, as length of accounts, past payment history or other unpaid accounts also affect your score. Regardless of the change in your score, future lenders can see that you didn't make your payments on time and your vehicle was taken back by your lender.

Past Due Amounts and Collections

Your past due loan balance remains on your credit report, which is the amount you still owe after the vehicle repossession. Your bank will resell the car after seizing it, but you're still responsible for paying the loan balance if the car was sold for less than you owe. If you don't pay the bank, it may transfer your debt to a collection company. The unpaid balance from the repossession still remains on your credit report, and a collection company can also report your debt to the credit bureaus, resulting in two negative accounts.

Judgments

If your lender sues you for non-payment, it can issue a judgment against you to garnish your wages. The judgment is reported to credit bureaus, appearing on your credit and on background checks for at least seven years. Even if you pay the loan balance, the repossession, judgment and previously past due balance still remain on your report. A judgment further damages your credit, even if the judgment is reported years after your repossession.

Settlements

If you decide to settle the account balance with your original lender or with a collection company, your credit won't immediately improve. The previously reported information does not disappear from your credit report and your account will read as "settled" rather than "paid." Expect to pay taxes on the unpaid portion of your loan balance. The Internal Revenue Service views the unpaid amount of a loan settlement as income, which you must report on your taxes.

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Early Termination of Car Lease

Leasing a new car can give you the opportunity to get the car you want for a payment that you can afford. In some cases, after taking out a lease on a car, you may want to get out of the contract early. This can cost you money and it could hurt your credit.

Walking Away from the Lease

Some people in this situation simply walk away from the lease. They drive the car back to the dealership, hand over the keys and then stop making lease payments. While this will work, it also can damage your credit significantly. When this happens, it is reported on your credit report as a repossession. The auto lease is a financial contract, and when you do not continue making payments, you are breaking this contract with the auto dealer.

Paying the Difference

Another approach that can help salvage your credit is to take the car back and pay what you still owe on the contract. In this situation, the company will make you pay the difference between what the car is worth and what you still owe on the lease. Depending on what type of car you have and when you break the lease, this could be a sum of thousands of dollars. Most consumers who want out of their lease do not have enough money to pay this fee.

Transfer the Lease

Another approach that you could take when you want to get out of a lease is to transfer it to someone else. This is a much less expensive proposition for you as the original lessee. This process will also not damage your credit history. With this approach, you find someone who is willing to take over the lease payments and the car for you. You typically have to pay some fees and transfer charges, but it is a much more attractive option.

Selling the Car

When you have a lease that you no longer want, another option that you could pursue is selling the car. Every lease has a buyout amount that you can pay the dealer and then get out of the contract. If the resale value of the car is somewhat close to this buyout amount, you could sell the car and then pay the difference between the two. When you take this approach, you must have enough to pay the difference or the payments will continue even though you do not have the car.

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