Selling a Car: Loan to Car Value

You can sell your vehicle privately or to a dealership even if you still owe money on your auto loan. If you owe more than your car's value or your sales price doesn't satisfy the loan balance, you must pay your lender to release the vehicle's lien. Otherwise, you can keep the profit you make from your sale.

Obtain Your Payoff

To determine if you'll need to come up with extra money to satisfy your vehicle loan, retrieve your car's payoff amount. Call your lender to find out the amount of your payoff and your loan's per-diem amount. A per-diem is the amount of interest you pay toward your loan daily. If you make a payment during the time you are trying to sell your car, call your lender again to obtain the loan's payoff amount, as some of your car payment goes toward interest charges.

Determine Vehicle Value

Despite your loan payoff amount and a likely desire to make a profit, you can simplify the car sale process if you ask for the correct private sale value. Several appraisal guides are available online, all of which offer different prices for vehicle values. Use Edmunds.com and the Kelley Blue Book website to access private sale values for your car. Choose the correct condition for your vehicle during the appraisal process, as condition can change your car's value by thousands of dollars. Use an average of both appraisal guides to determine a fair selling price.

Working With a Buyer

You don't have to advertise that your vehicle still has a loan balance when trying to sell your car. It is not unusual for a person to sell a vehicle while a loan still exists. Before you sell your car, find out your lender's payoff process, including the time that it takes to get your title or lien release so you can better work with a buyer to transfer ownership quickly. Once you have an interested buyer, arrange to bring him to your bank or credit union to satisfy your loan. If you owe more than the vehicle's value, have your money ready to pay off the loan at the same time.

Paying Off the Loan

If your lender is not local, arrange to send in any amount you still owe on the loan before your buyer pays. Then, arrange to have your buyer contract your lender to discuss your account information and make her payment. If the lender is local, go together to complete the payoff process. Once you have a lien release, give the original to the buyer, a requirement in most states to release the lien from the title. If your state sends the title to lien holders instead of registered owners, known as a title holding state, retrieve your properly signed title and go to a motor vehicle office with your buyer to transfer ownership.

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When Paying Off a Car Loan Can You Insist on Getting the Title?

Once you pay off your car loan, you become the vehicle's sole owner and should receive a title, as your lender no longer has financial interest in the vehicle. You shouldn't have to insist on getting the car's title; your lender should provide you either with the vehicle's title or a proper lien release that states the vehicle's loan is satisfied.

Contact Your Lender

Call your lender to discuss your account and ask when you'll receive your vehicle's title. Depending on your state, you might not receive a new title at all, but a lien release to supplement your title. This document proves you satisfied your loan, allowing you to sell your vehicle or apply for a new title to remove the lien holder. Once you contact your lender, you might find that your loan isn't satisfied because of outstanding late charges or other issues you need to fix before receiving the lien release or title.

Title Holding States

Some states do not send a vehicle's title to the registered owner but to the lender instead. In this event, you'll need to obtain the title from your lien holder. Ask your lender when you'll receive the vehicle's title. If your lien holder is local, you can likely go to your lender and retrieve the car's title and a lien release. If your find lender tells you that your state motor vehicle department should have already sent the title to you, you'll have contact your motor vehicle department to resolve the problem.

What to Do With a Lien Release

If your vehicle's title shows a lien holder, keep your lien release in a safe place with your title. If you sell your vehicle or transfer ownership in the future, the new owner needs the original lien release to transfer ownership and remove the lien. You can also use the lien release to apply for a new title in your own name by going to a motor vehicle office with your title and lien release to request lien-free title. States vary on title application charges, but you can save money by holding onto the title and lien release.

Consideration

If you paid off your loan by refinancing, you won't get the title in a title-holding state until you pay off the loan. If you don't, you will receive your title, although you might wait over a month. Your new lender must pay off your old lender first. Then, your old lender requires time to process paperwork, as does your new lender and state motor vehicle department. Once your lender has submitted the title paperwork to a motor vehicle office, you can call the state department directly for a status on your title.

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California Finance Lender Repossession Laws

Under California law, repossession agencies hired by car owners must have valid licenses to repossess issued by the California Bureau of Security and Investigative Services. However, California law does not require banks, financial institutions and other legal owners to obtain a license before they can reclaim their collateral. In-house employees or owners can conduct repossessions without licenses since they are not third-party agencies.

Rights

California law requires repossession agencies to follow different guidelines than owners of repossessed vehicles such as banks. Banks, financial institutions and other owners may comply with a less restrictive set of repossession laws. Finance lenders and repossession agencies can conduct repossessions while the borrowers are physically present, and it is against California law for borrowers to attempt to thwart their repossessions. Additionally, under California law, it is illegal for borrowers to attempt to hide their vehicles, and garage owners and storage facilities must notify the local police department of all new vehicle storages. California law allows vehicle owners to repossess their cars and exercise their ownership rights after one missed payment. The state will allow owners to exercise their contract rights if both parties --- buyer and seller --- entered into a binding contract.

Police Notification

Both repossession agencies and finance lenders have a legal duty to notify the local police department within one hour of repossession. The notification to buyers rule is different for repossession agencies. Although repossession agencies are legally obligated to notify borrowers within 48 hours of repossession, finance lenders are not. California law requires repossession agencies to send a "Notice of Seizure" within 48 hours after repossession.

Personal Effects and Sales

Finance lenders and repossession agencies have bailment duties, and they must store personal items left in vehicles for 60 days, but after that period, they may throw them away or sell them. Lenders do not have to keep an inventory list of the personal belongings, but repossession agencies must keep inventory lists of items found in the car and if these items were sold or thrown away.

Acceleration Rights

Under California law, repossession agencies must provide borrowers with redemption rights to repurchase their vehicles after paying the amount due and owing at the time of repossession. However, banks that repossess can accelerate the terms of their sales contracts if borrowers committed fraud by using false information on their credit applications or attempted or threatened to destroy their vehicles. Banks may also accelerate contracts if their cars were used in the commission of a criminal act or the buyer committed or threatened the bank with violence during repossession. Last, banks can demand full payment if the borrower damaged or threatened to damage the vehicle.

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 I Get a Student Loan for a Car?

Student loans provide young people the financing they need to obtain a post-secondary degree. These loans may be issued by a private lender, like a bank or credit union, or directly by the federal government. Irrespective of the source of the money, student loans are intended to support learning and so in most cases proceeds cannot explicitly fund the purchase of a new vehicle.

Student Loan Proceeds

Student loan proceeds must be used only for qualified educational expenses. These expenses, defined by the financial aid office of the student's college or university, include tuition, room and board, fees, books, equipment, commuting expenses and computer purchases. The money may not be used to purchased fixed assets like houses, vehicles or boats.

Excess Awards

Some institutions allow students to obtain the maximum amount of federal financial aid even if the student has no educational need for the money. For example, a public university may charge $5,000 in tuition and $7,500 in room and board each year. A student may have the option of taking a loan for $12,500 despite not taking a full-time load of classes and living off-campus. The award money not taken by the school will be refunded to students as a lump-sum payout. Many students use their "refund" money for ordinary expenses or to pay down bills. Be aware, however, that the law and the loan agreement requires students to use loan money only for qualified educational expenses. Penalties can range from disqualification from future awards, to criminal prosecution for defrauding the federal government or mail fraud, with penalties as high as 20 years in prison and $250,000 in fines.

Auto Loans

Most auto loans are secured, so with a minimal up-front down payment of as little as $1,000, most people -- even with no or bad credit -- can qualify for a loan program. Subprime loans are typically more expensive than loans to people with solid credit.

"Student Auto Loans"

Some websites advertise a "student auto loan" with misleading language that implies that a student can get a car just as quickly and easily as a student loan. Beware the fine print, however--"student auto loans" are merely personal loans marketed to students and have no relationship at all to the ordinary student-loan process.

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Can I Co-sign for Multiple Cars?

You can co-sign for multiple car loans as long as your credit is in good standing. Your income must also be enough to afford the payments of the loans you sign for. However, co-signing for one loan presents risks, let alone signing for several. Before you co-sign for multiple loans, consider the risks involved.

Debt-to-Income Ratio

Your ability to co-sign for multiple loans depends on your debt-to-income ratio, which banks used to determine whether you can afford the car payment you apply for. The lender checks your credit to view any revolving credit and debts you currently have. Based on the information you provide in your credit report, the lender also uses your income and time with employer to gauge whether or not you can afford multiple car loans. If your income is sufficient and the amount of your debts and car loan are compatible, you can co-sign more than once.

Your Responsibility

Because you need good credit to be able to sign for a car loan, co-signing for people who do not have good enough credit to obtain their own loans posses substantial risk. It is your responsibility to pay for the loan if the person you sign for misses a payment or becomes past due. Also, late payments are reported on your credit report, not just the main borrower's. Constant late payments or a repossession can significantly damage your credit rating.

Dealer Tricks

Sometimes dealerships know you will not qualify for an approval on two loans at the same time, if you're buying the vehicles at the same time. In such an event, the dealer may send your credit application into two separate banks at once so that it appears you are purchasing one car, and not two. It takes a few days for your loan to go through, so neither bank will be aware of your intentions. Do not allow the dealer to do this. If you cannot afford the car payments of the vehicles you're co-signing for, you will not be able to stop a repossession.

Future Expectations

Adding new, multiple lines of credit to your credit report will affect your credit score, future loan approvals and interest rates. For example, two $15,000 car loans put you in $30,000 of debt, which is unattractive to lenders. You may not be able to trade in your own car for another because of this. Or, if the people you are co-signing for default on their loans, it can cause new account interest rates to soar if you apply for credit again. Carefully consider your future lending needs and whether you trust the people you are co-signing for.

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How to Manually Calculate Car Payments

Today is the day that you have finally purchased that new car that you always wanted. You headed to the dealership to nail down the terms of the contract, secure the financing and pick up your new baby. When you arrange for a car loan, you need to determine the amount that you can afford to make on monthly payments. The information that you need to determine the payments is the interest rate, the length of the loan and the total amount of the loan.

Instructions

1

Determine the interest rate per month by dividing the interest rate by 12 months. For example, a 6 percent loan / 12 = 0.005.

2

Add 1 to the interest rate per month. In the example, 1 + 0.005 = 1.005.

3

Raise one plus the interest rate per month to the power of the number of months of the loan. If the number is expressed in years, then multiply the number of years by 12. In the example, if the borrower has the loan for three years, then 1.005 ^ 36 = 1.196680525.

4

Subtract 1 from the number calculated in Step 3. In the example, 1.196680525 - 1 = 0.196680525.

5

Divide the interest rate per month by the number calculated in Step 4. In the example, 0.005 / 0.196680525 = 0.025421937.

6

Add the interest rate per month to the number calculated in Step 5. This is the interest factor. In the example, 0.005 + 0.025421937 = 0.030421937.

7

Multiply the interest factor by the total amount of money borrowed for the car loan. In the example, if the borrower borrowed $15,000, then $15,000 * 0.030421937 = $456.33.

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Is a Car Loan a Secured Debt?

Car loans are a type of secured debt. Lenders use the car as collateral when writing the loan, and if the borrower defaults, the lender assumes control of the vehicle. Some people use home equity lines to purchase vehicles in which case the collateral for the debt is the borrower's home rather than the car.

History

Before the the mass production of cars became commonplace, car dealerships paid cash for vehicles and sales were scarce. After World War I, production increased and General Motors established its own financial services arm; General Motors Acceptance Corp. In 1959, Ford founded the Ford Motor Credit Co. LLC, and later in the 20th century other manufacturers including Honda and Toyota began to offer vehicle financing. Many banks have dealer services divisions that provide wholesale lending services to automobile dealers, and banks also lend to individuals.

Time Frame

Most banks allow customers to borrow only against cars that are less than seven years old. Banks regard vehicles as depreciating collateral and do not want loan terms to extend past the useful life of a car. Car payments are due monthly and normally begin 30 days after the purchase of a vehicle. Short-term car loans of three years or less have lower interest rates than longer-term loans because the car has less time to lose value.

Misconceptions

Many people mistakenly believe that they can co-sign on a vehicle without assuming responsibility for the debt. Co-signers are liable for the debt if the principal borrower defaults on the loan. The payment history of the loan is reflected on the credit report of both the borrower and the co-signer. Banks allow individuals without an ownership interest to co-sign for cars, and many parents do so for teenage children.

Considerations

Credit unions and small banks tend to offer better rates for car loans than large banks. Small financial services companies have limited deposit bases and are more averse to taking on large risks such as commercial loans or jumbo mortgages. To generate profits they offer small loans such as car loans because two or three car loan defaults would have less impact on their financial stability than one large mortgage default. Small banks offer lower rates to lure clients from large competitors who focus on lucrative home lending.

Warning

People who buy cars with home equity lines often cite the tax deductions offered on home loan interest payments as a key factor in the decision. Home equity lines have variable interest rates, and when interest rates are low, they may result in lower payment amounts than car loans, but the rates rise every time the prime rate increases. Many people do not realize that HELOC payments are interest-only and rates can rise as high as 20 percent.

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Does Refinancing a Car Loan Lower Credit Scores?

Consumers refinance cars for various reasons, according to Edmunds.com editor Philip Reed. For example, you may want to refinance a high interest loan because your credit score now qualifies you for better terms. You may have discovered that your dealer-arranged financing is above market rates. You may have signed up for a short repayment term, but your financial picture changed and you need smaller payments. Be aware that loan refinancing affects your credit score.

Loan Applications

Banks and other financial companies order your credit information from at least one of the major credit bureaus when you apply for loans. This credit review is called a "hard inquiry," according to The Fair Isaac scoring company's MyFICO website. A single inquiry may have no effect, but additional credit checks may pull down your credit score by as much as five points each. This does not hurt you if you have a comfortably high score, but it can push you down to a sub prime level if your score is borderline.

Loan Shopping

Loan shopping often means filling out a number of applications within a relative short time frame. All of these hard inquiries pop up on your Experian, Equifax and TransUnion credit reports. Multiple credit checks by lenders look very bad on your records because statistics show that you are eight times more prone to file bankruptcy if your credit files show six or more hard inquiries, according to the MyFICO site. Avoid the damage by confining your rating shopping to a two-week period, as scorers will recognize what you are doing and view them as a single credit check.

Payment History

Companies that finance car loans usually report your payment performance to the Experian, Equifax and TransUnion credit bureaus. The MyFICO site considers on-time payments and delinquencies in its credit score calculations, where they make up 35 percent of your score. Your refinanced car loan will raise your score if never miss a payment deadline. Car loans also add variety to your credit use, which supports a good credit rating. MSN Money writer Liz Pulliam Weston explains that you need a mix of revolving accounts and installment loans to maximize your score.

Considerations

Your car payments drop if your new loan runs the same length as your previous financing, according to Tara Baukus Mello of Bankrate.com. For example, if you refinance a five-year car loan after making two years of payments and get a new five-year loan, the payment goes down because your balance is lower than what you financed originally and you are paying less interest. This helps if money is tight, but it is better to get a loan for the shortest possible term to avoid owing more than your car is worth for an extended period.

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What You Need for Leasing a Car

For many drivers, leasing represents an appealing alternative to buying a vehicle outright. With a lease you only keep the vehicle for a set length of time, after which you can choose to buy it outright or turn it in and find a new vehicle to buy or lease. Leases require much of the same information and paperwork as a car sale, as well as some new information about your driving habits.

Income

One of the most important things you need for leasing a car is a stable income. Just as when you finance an auto purchase, you become responsible for monthly payments once you sign your lease agreement. If your income falls or disappears due to job loss or other factors, you must still pay your monthly lease bill or risk losing your car to the lease company. Evaluate your budget to determine how much you can afford each month toward your auto lease.

Credit History

To get a lease you must also have a solid credit history. The interest rate you receive may depend on your credit score, but buyers with poor credit might not qualify for a lease at all. Your credit history tells the lease company, which is often not the same company as the dealership through which you make the deal, that you have a high likelihood of being able to make your lease payments based on your history of handling debt, your outstanding debts and the value of your savings and assets.

Mileage Prediction

Before you sign up for a lease, you'll need to know approximately how many miles you plan to drive annually. Every lease has a mileage allowance, though allowances vary from lease to lease. If you exceed the mileage allowance before your lease is over, the leasing company will charge an additional fee per mile over the limit unless you buy the car outright. A 12,000-mile annual allowance won't be enough if you expect to use the car to drive to and from work every day at a great distance, or if you plan to use it for long driving vacations every summer. In these cases, a 15,000-mile annual allowance will be more appropriate, even if it costs more up front.

Down Payment

You'll also make a down payment when you sign your lease agreement. Even though you may never own the vehicle outright, your down payment will reduce how much you owe over the term of the lease, resulting in lower monthly payments. Your down payment may also include the fees and tax on your lease deal so that you avoid paying interest on them altogether. Finally, some lease companies charge a security deposit to cover the cost of damage to the vehicle, which is also part of your initial down payment.

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Do I Owe the Remaining Money if My Repossessed Car Was Sold?

The fact that your car has been repossessed does not mean that your problems are over. When a company repossesses your car, the company is likely to end up pursuing you for more than just back payments. By understanding what will happen when your car sells, you can take steps to protect your financial interests.

Repossessed Car

When a company repossesses your car, you generally have a short period of time to catch up on the payments and redeem the car. The amount of time that you have to redeem the car will vary by state. For example, in Illinois you have 21 days to redeem the car and in California you have 15 days to redeem the car after receiving written notice that the finance company intends to sell the car. If you fail to redeem the repossessed car, the finance company will sell the car to recover the balance of the loan. Generally, the finance company will sell the car at auction, often receiving less than the retail value of the car.

Deficiency Balance

One the finance company sells the car, the company will apply the amount received from the sale toward the balance on the loan. In most cases, the car will not sell for enough to cover the loan. You will still legally owe the remaining balance, or deficiency balance, to the finance company. It is possible in some situations for the car to sell for more than the balance of the loan. In this scenario, the finance company will owe you the difference between what the car brought at auction and the balance of the loan.

Payment Arrangements

Once the finance company contacts you to inform you of a deficiency balance, you will need to make arrangements to pay the balance. A finance company may demand that you pay the entire balance in full, but most will work out a payment plan with you. If you fail to pay the deficiency balance, the finance company may take legal action against you to collect it. Lenders may forgive debt in some situations. However, if the lender forgives the debt, you may owe additional taxes because the IRS treats forgiven debt as taxable income.

Other Information

The finance company may incur various costs when repossessing and selling your car. For example, the company will likely have to pay fees to a repossession company and an auction company. In most cases, the finance company can legally charge you for these fees in addition to the deficiency balance. The laws and regulations regarding car repossessions and collections vary by state. For information on the laws in your state, contact your states attorney general.

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Can a Defaulted Car Loan Garnish a Salary?

Before purchasing an automobile, it is important to budget wisely and make sure you will be able to afford the monthly payments. However, sometimes unforeseen circumstances arise and without the adequate amount of emergency savings, you may be unable to continue making car payments. It is important to understand the effects of not being able to afford loan payments, including what can happen to your wages or salary.

Garnishment of Wages or Salary

When your employer garnishes your wages or salary, it withholds a certain percentage each pay period until the debt you owe is paid off. A garnishment can occur because of a failure to pay your taxes, child support, loans, court fines and credit card bills. The federal law permits a debtor to request that an employer garnish up to 25 percent of the employee's wages or salary. However, many states set the limit below this amount.

Requirements

For a lender or other entity, except the Internal Revenue Service, to require that the employer garnish your wages, it must obtain a court order stating that it is permissible. Often, it depends on the amount you owe as to whether the lender will sue you. For smaller amounts, it is often not cost-effective.

State Limits

Each state sets its own limit as to how much the employer is permitted to garnish for each pay period. This is generally a percentage of your pay. Some states, such as North and South Carolina, Texas and Pennsylvania, do not permit an employer to garnish your wages or salary except in cases where you owe the Internal Revenue Service. In these states, the lender or credit card company must pursue other avenues to obtain the money that you owe, such as repossessing your car.

Ways to Avoid Garnishment

Before buying a car, calculate your monthly income and expenses. Create a new budget that includes the added expense of a car payment and insurance increase. Determine how much you can afford to spend without a significant risk of default. Accumulate savings that equal at least three to six months of expenses so you can avoid defaulting on the loan if you lose your job, for example. In many cases, if an event occurs that leaves you unable to afford payments, speaking to the creditor can help avoid court proceedings and possible garnishment of your wages. This is an expensive avenue for the lender as well as the borrower.

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How to Refinance a Bad Credit Car Loan

Having bad credit may not be your fault, but when the time comes to look for a loan, that bad credit can hurt you tremendously. This method will help you refinance a high interest car loan into a lower interest car loan, even with less than perfect credit.

Instructions

1

Check the value of your car. If you owe more on the car than the car is actually worth you will not be able to refinance it. The reason for this is that in the event of a repossession, the bank would not be able to recover their money. (See resources section for KBB website)

2

Reread your original contract. The goal of refinancing is to get rid of those sky high interest payments. If, however, a "prepayment penalty" was written into your original loan you will not be able to refinance without refinancing the entire amount owed on the interest into the new loan amount.

3

Check your contract for scams. If you financed through a dealership, it is very possible you are paying extra every month for "perks" you did not know you had like roadside assistance or an extended warranty. Canceling these programs may free up enough money to make refinancing not necessary.

4

Start working on your credit. Making regular payments on your car improves your credit every month. Try to dispute off some negative payments, or have some old late notations removed. You don't have to have perfect credit, but this cannot be attempted with abysmal credit.

5

Wait 6 months from the original purchase. You cannot refinance an auto loan until 6 months or longer have passed from when you bought the vehicle. This gives you time to get to work on your credit.

6

Pull your credit score. When enough time has passed to refinance, pull your credit score to see what you have to work with. Always know your own buying power.

7

Start shopping around for a low interest auto loan. Do not apply yet, since you do not want anyone to pull your credit themselves. Give them your score and let them tell you the rates you qualify for.

8

Choose the bank or credit union with the lowest rates and refinance the vehicle for lower monthly payments.

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What to Look for in Buying a Used Car

Buying a used car can save you a substantial amount of money compared with buying a new car. When you buy a used car, you have to be careful to make sure that you get a quality vehicle. Before buying a used car, a few factors should be evaluated.

Vehicle History Report

Before buying a used car, you should get a copy of the vehicle history report. A vehicle history report lists all of the major events that have affected a car. For example, if the car has ever been in a wreck, you can find out by reading the report. If the car has ever had any major repairs or overhauls, you can also find out this information through the vehicle report. You can look up the report using the vehicle's VIN number.

Body Damage

If you do not have access to the vehicle report, you may not know if the car has ever been in a wreck. When a car has been in a serious wreck, it can significantly affect the way that it drives. One way to tell if a car has been in a wreck is to look for damage on the outside of the body. In some cases, it may simply be a small dent, while in other cases, it could be hiding bigger problems. If the front of the car looks damaged in any way, it can lead to serious driving issues.

Under the Hood

Under the hood of the car, you will find several clues that can tell you whether this would be a quality vehicle to buy. Look under the hood and inspect the engine. You need to check the oil, the transmission fluid and the general condition of the engine itself. If you do not know anything about engines or cars, do not hesitate to hire a mechanic to take a look at it for you.

Test Drive

Before buying a used car, you need to take it for a test drive. A test drive will give you a good idea of how the car runs. If the car has any serious mechanical issues, you can sometimes find them during a test drive. If you have trouble getting the car started or it does not drive smoothly, you may want to avoid purchasing the car.

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What Is Gap Insurance When Leasing a New Van?

The purchase of gap insurance when leasing a new vehicle, such as a van, should be seriously considered. Gap insurance is a supplement to regular vehicle insurance to protect the lessee against a significant financial loss. Gap insurance is supplemental to the regular insurance on a leased van.

Gap Insurance

Gap insurance is an additional insurance policy that pays the difference, or gap, between what the regular insurance pays and the payoff on the van lease if the van is demolished in an accident or stolen. Payments on a lease contract reduce the pay off amount of the lease at a very slow rate. If the van is totaled there may be a significant difference between what insurance pays and the cost to pay off the lease contract.

Upside Down

A new van will depreciate as soon as it is taken off the dealer's lot and will continue to decline in value. The Bankrate.com website notes the average vehicle will lose 30 percent of its value in the first year. A lease contract is usually entered with a low or no down payment, providing no equity cushion to cover the inevitable depreciation. The result is a van that is worth significantly less than the pay off of the finance contract if the contract must be terminated early. This situation is called being "upside down" in the vehicle and can be thousands of dollars.

Regular Vehicle Insurance and Gap

Regular vehicle insurance will only pay the market or replacement value if the vehicle is demolished in an accident. When the van is lost by accident or theft, the lease contract will have to be paid off. The insurance amount will usually not be enough to pay the contract, leaving the balance to be paid by the van lessee. A gap insurance policy will pay the difference the regular insurance does not pay, including the deductible amount on the vehicle insurance.

Buying Gap Insurance

Gap insurance is usually bought at the dealership when the lease contract is completed. The dealer finance department will offer the gap insurance and be able to roll the cost into the lease payment. It is also possible to buy the gap insurance from an outside or online vendor. This insurance can be purchased after the lease contract is in effect. It may be a good idea to get a price on gap insurance before going to the dealer and use that information to negotiate a competitive price for the insurance from the dealership.

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How to Make a Contract for the Sale of a Car

If you've ever purchased a car from a dealer, you might recall signing a number of documents. The dealer drew these papers up as a way to protect himself in the event you should return with a complaint or disagreement over terms of the sale. When you sell a car you should do the same thing. Your document doesn't have to be pages long, but it should include details of the sale.

Instructions

1

Include the basics. State your name and address as well as the name and address of the buyer. Include the date and time. Including the time will protect you in the event the buyer takes the car for inspection after the sale and claims that he took it prior to signing the contract and that you made side deals with him orally.

2

Make it easy on the Department of Motor Vehicles (DMV). Clearly state the make, model, year and vehicle identification number. Also, include the mileage at the time of purchase.

3

Be honest about the price. Your contract should include the price that was actually paid for the car. A buyer will sometimes ask you to state a lower sales price so that his tax obligation is lower. As tempting as it might be to do so, it could hurt you in the longrun. If you're selling the car on a payment plan you will have no way to prove to a court how much the buyer actually agreed to pay if she stops paying. Even if you receive full payment for the car at the time of purchase, your credibility could come into question if the buyer later chooses to take you to small claims court for any reason.

4

Make a copy of the Bill of Sale and make sure that both parties sign each copy. Keep one for your records. The buyer will take his to the DMV along with title to the car to purchase tags.

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Can Someone With a Bankruptcy Be Able to Co-Sign for an Auto Loan?

A bankruptcy significantly lowers a person's credit score. Over time, however, a person who claimed bankruptcy can re-establish her credit. If your co-signer recently claimed bankruptcy, she's probably not a good candidate for a loan co-signer. If your co-signer has re-established her credit, you might obtain a loan approval if the co-signer meets other lending criteria.

Recent Bankruptcy

Tara Baukus Mello of Bankrate.com warns that accounts included in a bankruptcy remain viewable to potential lenders for seven to 10 years, depending on bankruptcy type. Bankruptcy affects individual credit scores differently. Even so, a lender may take your cosigner's income and debt responsibility into consideration if you were declined for a loan because of income. If your co-signer recently claimed bankruptcy and you have poor credit yourself, obtaining a loan approval isn't likely.

Re-establishing Credit

As time passes, the impact of a bankruptcy on credit score decreases. After bankruptcy, someone can reestablish his credit by paying bills, loans and other lines of credit on time. If your co-signer has obtained his own car loan or a line of credit since the bankruptcy, his credit might have improved. If years have passed since the bankruptcy and your co-signer hasn't initiated new lines of credit to prove his ability to pay accounts on time, your co-signer hasn't re-established her credit.

Obtain a Preapproval

Apply for a loan preapproval with your co-signer before you begin shopping for a vehicle. Both you and your co-signer can submit a credit application to secure the terms of an auto loan. If your co-signer's bankruptcy still affects his credit and lending risk, your application might be declined or you might pay a high interest rate if approved. Both you and your co-signer will have to provide proof of income. Use a different co-signer if your application is declined.

Considerations

If a lender approved your loan at a higher interest rate or shorter term than your budget allows, you might be able to refinance your loan by yourself at a later date depending on why you needed a co-signer. Making loan payments on time improves your credit rating. If you were declined because of your income or debt-to-income ratio, consider refinancing when you're able to provide proof of increased income or when you lower your debt. If you plan to refinance in the future, make sure your auto loan provider doesn't charge prepayment penalty fees.

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Do You Have to Get Insurance for a Leased Car?

As part of your lease contract, you must carry full-coverage insurance for the entire period of the lease. In fact, you must provide proof of this coverage before you leave the dealership in your new car. Although your salesperson will work with you to set up your coverage and require proof, it is your responsibility to consistently carry the full-coverage policy.

Insurance Coverage

A full-coverage insurance policy covers repairs to your car in the event of an accident or for the vehicle's total loss. It is the most expensive of insurance policies (as compared with a minimum-liability or comprehensive policy), as the insurance company pays for the market value of your vehicle in the event of a total loss. Lenders have different requirements, such as your maximum deductible and coverage limits. Check with your new-car salesperson for limits required by the leasing company.

GAP Insurance

Guaranteed asset protection (GAP) insurance is also a requirement for leased vehicles. It covers the gap between the value and the actual vehicle payoff amount. However, not all insurance companies offer this coverage. Still, the protection is mandatory and you may have to buy it separately through the dealer. In that case, it becomes a portion of your lease payment. Insurance companies pay for the vehicle's determined market value, which does not include the bank's payoff amount. It generally takes about about three years for your vehicle's buyout amount and market value to equal, as depreciation is highest when a vehicle is new.

Insurance Reporting

Your insurance company reports your coverage, or lack thereof, to both your state's motor vehicle office and lender. Your bank is listed as the policy loss-payee, so your insurance company automatically notifies the lender at the time of policy renewal or cancellation. If you do not maintain your policy, the bank has the right to add a policy to your vehicle to protect itself from loss. The cost of bank-added insurance is significantly more expensive than the amount you would normally pay. Your leasing contract should further explain the costs and details for added insurance, or you can call your lender to find out more.

Warning

Again, your lender is listed as the loss payee, not you. When you lease a car, it belongs to the bank; you pay the bank for the time you intend to drive it. With that said, if you do incur a total loss and the insurance company pays it off, you will not receive any money for the vehicle, as it goes directly to the bank. You should consider this before you decide to put money down toward your lease. Putting out money toward your lease may offer you a cheaper monthly payment, but you won't see any of it back should you total your vehicle. This can prove a loss for people who pay thousands down or the entire lease cost upfront.

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How to Sell Used Cars Locally

Finding a buyer for your used automobile may prove difficult. Potential buyers may prefer dealer selections and warranties. Even so, you can successfully complete a private sale of an automobile. The key is recognizing and utilizing different local marketing techniques to attract buyers.

Instructions

1

Determine a fair price. Visit Kelley Blue Book online to research the recommended private party sale price for your used automobile. Price the car fairly to attract attention.

2

Purchase car window paint from an auto parts store. Print "for sale" on the rear window and include your contact number and the asking price for the vehicle. Drive the car as advertisement. Even if you've already purchased a new automobile, occasionally drive your old vehicle around time to attract attention.

3

Use the local newspaper's classified section to advertise your car. Include detailed information on your automobile such as the make, model, year, mileage, and condition in your advertisement. Don't forget to include a telephone number or e-mail address.

4

Take advantage of free web advertisements. Create a detailed car advertisement on Craigslist or your local Autotrader website.

5

Talk with local dealers. Visit a few local dealers to see if they're willing to purchase your automobile. Obtain several quotes before making a decision.

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How to Buy a Vehicle After a Bankruptcy

Some people lose their assets in a bankruptcy proceeding, wherein lenders take possession of their automobiles to repay their debts. Since reliable transportation is a necessity, you may find yourself in the market for a new or used car after a bankruptcy. If you don't have cash to pay for a car outright, you might consider financing a car. While a bankruptcy hurts your personal credit file, it's possible to finance or buy a car after bankruptcy. In fact, buying a car can help your score.

Instructions

1

Rebuild your credit file with a new line of credit. Acquire a secured credit card immediately after your discharge to start rebuilding your credit score. Seek a card from your bank or another financial institution in your local area. Get information on the card, such as the annual fee, monthly fee and the minimum security deposit. Also, make sure the bank regularly reports account information to the credit bureaus.

2

Keep up with your remaining debts. You can exclude student loans and mortgage loans from a bankruptcy proceeding. Retaining these debts and paying them on time each month benefits your credit score and helps you build a better credit history.

3

Start saving money. Down payments are not required for car loan. But if buying a vehicle after bankruptcy, having a down payment can help you qualify for the loan, and it also lowers the loan balance. Typical down payments are 10 to 20 percent of the sale price.

4

Use a co-signer for the vehicle loan. Pick someone with a good credit history, and ask him to co-sign your new auto loan.

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Buying a Second Hand Car

Purchasing a secondhand vehicle is a way to get transportation without paying the exorbitant sticker prices that often accompany brand new cars. However, consumers should be more cautious and educated when purchasing a secondhand vehicle as it can be subject to more problems than new cars. This is attributed to the fact that it was previously owned, which means there may have been problems that were not disclosed by the original owner.

Instructions

1

Conduct research on the type of car you plan to purchase. Choose two or three potential models in case you can't find a used version of the one you want. Figure out the retail price of the newer model as well as the value of the used models, depending on the year. Also research potential costs for maintenance of the vehicle and any necessary upkeep.

2

Test drive a few different used models. You may have every intention of purchasing one type of car, but upon doing a test drive, you might not like the way it drives or handles on the road. Drive several different cars and note the ones that drive well, have good fuel mileage and boast a cozy interior. Pay attention to the various features of each car as you drive it to determine which one would be an optimal purchase choice.

3

Request a vehicle history document from those models you are considering purchasing. This document gives you an idea of the real condition of the car as it details major accidents in which it was involved, major body and/or repair work, flooding or other damage from natural disasters and more. The vehicle history report also gives you a more accurate mileage count, in case the odometer was rolled back to make the car look as though it had less miles on it than it actually did.

4

Take the car to a reputable mechanic before making your purchase. In some instances, the dealer may suggest a mechanic willing to look at the car free of charge. However, it is best if you take the car to your own service professional in the event that the dealer and his mechanic are working together to get the car sold -- at all costs. Ask about any problems your mechanic might foresee with this car as well as the condition of major parts, such as the engine and transmission.

5

Read over paperwork and contracts carefully. Make sure the previous owner does not still owe money for a lien on the vehicle and that the title is completely cleared. Have the previous owner sign the title over to you as soon as you arrange to give him the money for the car and that the person signing the Bill of Sale is actually the owner of the vehicle. If you are working with a dealer, read the fine print on all of your contracts carefully and make sure to get all warranty information before you leave the lot.

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Can a Person With a Very Low Income Get Financing for a Car?

Getting access to a vehicle is important for most people, as it is the way that they get to and from work. If you have a very low income, you may be skeptical about your odds of being approved for vehicle financing. Even though you may not be able to qualify for an expensive car, many dealerships will work with those who have low incomes.

How Much Car Can You Afford?

Before you start looking for financing in this situation, you need to determine how much you have to spend each month on a car. When making this calculation, you need to consider the total amount of money that you will have to pay toward the car, not just the cost of the vehicle itself. You will have to pay for maintenance and fuel for the car as well. You should try to keep your mortgage payment below 20 percent of your net income to allow enough money to live on.

Other Factors

When you start applying for financing for a new car, you will be evaluated based on many factors. The lender will want to know not only what your income is, but also what other payments and debts you have. If you have a very low income, you will be more likely to get approved if you have no other debt and very few payments to make. When you are stretched to the limit financially, you will be less likely to get approved.

Buy Here Pay Here

Even if you have a low income or bad credit, you still may be able to get approved at a "buy here pay here" auto dealer. These dealers offer in-house financing programs and are generally very flexible when it comes to financing customers. As long as you can prove that you have some type of regular income, they usually are willing to work with you. With this kind of dealer you make your payment directly to them, usually on a weekly basis.

Down Payment

You can increase your chances of getting approved for auto financing when you have a low income if you are willing to make a larger down payment. If you have some money in savings, you should consider applying it to the down payment on your car. When you put a down payment on the car, the lender is less worried about financing the rest of the purchase. This decreases the risk of default on the loan and makes the deal more attractive for the lender.

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What Credit Score Is Needed to Purchase a Car?

Auto industry veterans have a saying, "there's [a rump] for every seat". Translated, it means there's a car for everyone. The same can be said for auto financing. Whether your credit is excellent, poor, brand new or somewhere in-between, chances are you'll be able to purchase a car, thanks to the many financing options now available to buyers with a range of credit scores.

"Good" Credit is Relative

Your next car purchase may be easier than you think.

The credit score you need to buy a car can depend in large measure on who finances the car. Credit scores range between 300 and 990, depending on the model used to calculate the score. Likewise, credit score classifications ("excellent," "poor," for example) vary, not only among credit scoring models, but also among lenders. Your 680 credit score may only be considered "good" by Auto Lender A, but "very good" by Auto Lender B.

Type of Lender

If your credit score is high enough, you may qualify for "prime" financing, which, according to Autoloandaily.com, typically requires that your credit score be at least 680. If you're unable to obtain prime financing, however, there are numerous "non-prime," "sub-prime" and "deep sub-prime" lenders that specialize in financing automobiles for borrowers with credit scores as low as 550, sometimes even lower. Additionally, you owe it to yourself to also investigate financing through banks and credit unions, many of which make car loans and whose credit score criteria can vary widely from one institution to the next.

Type of Dealer

If you're among the below-prime borrowers who assume it's easier to finance a used car from an independent dealer than a new (or used) car from a franchise dealer (manufacturer-authorized car dealer), think again. While, in the past, many franchise dealers used financing networks that overwhelmingly consisted of prime lenders, the prevailing economy -- and, by extension, the overall decline in many consumers' credit scores -- has forced many franchise dealers to include below-prime lenders in their networks in order to continue selling cars. Further, several of the big automakers now offer below-prime financing through their proprietary lenders, giving borrowers with a wide range of credit scores easier access to the types of cars they want to purchase.

Down Payment

The amount of your car loan is reduced by the value of your down payment, which can be either in cash or in the form of another car you trade in. The more money you put down, the less you have to finance, the lower your monthly payment and the greater the likelihood that the lender may be more willing to accept a lower credit score.

Considerations

You need to be aware that below-prime interest rates are almost always higher than prime rates -- sometimes much higher -- and can range from less than 10 percent to rates that approach (or even exceed) the levels of some credit cards. The spread between non-prime, sub-prime and deep sub-prime interest rates is even more pronounced with used cars, which, historically, have carried higher interest rates than new cars. Before deciding on a new versus a used car, or before committing to below-prime auto financing, you need to fully understand the effect that a higher interest rate will have, both on your monthly payment, as well as on the total repayment cost of the vehicle over the term of the loan.

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Car Buying Options

You have several payment options to choose from when purchasing a vehicle. Some purchase options require excellent credit, such as leasing, although some lenders and dealers market specifically to poor credit buyers. Before you start car shopping, consider your various purchase options and which best suits your budget.

Financing

If you don't have the cash on hand to purchase a car, you can finance it with an auto loan provider, regardless of whether you purchase from a dealership or a private seller. Many dealerships use a variety of banks and local credit unions to provide loans for its buyers. You can also pursue an auto loan at any lender you'd like. Rates differ by lender; be sure to check rates before you decide where to apply. Credit unions, local banks or online lenders are available. Obtain a preapproval before you shop. Doing so allows you to determine your interest rate and price range so you can stick to a budget.

Leasing

Leasing is an option for new cars; used car leasing may exist, but the monthly payments aren't usually worthwhile. For a lease, a bank purchases the vehicle you want from the dealership and then leases it to you, similar to renting with the intent to return at the end of the contract. Rather pay for the entire vehicle's cost, you only pay for its depreciation, which is based on the mileage and term that you choose. Because you end up paying for about half of the vehicle's value over a period of usually 3 years, your payments are cheaper than a comparable finance. Good to excellent credit is required for leasing.

Cash Payment

Dealerships and private sellers alike accept cash for a vehicle purchase. If you have the cash on hand, search within your price range to find an affordable car, but ensure you budget for taxes and motor vehicle fees, as well. Taxes can add thousands more to your purchase price. If you plan to purchase from a dealer, cash does not warrant a lower sales price. When consumers finance a vehicle, the dealership receives a check that is as good as cash. If purchasing a low-priced car, avoid having to spend additional cash on repairs after the purchase. Have a mechanic inspect a car out of warranty before you buy it.

Other Options

If you lack the cash needed to purchase a car and can't obtain a loan, you may have other options. Buy-here, pay-here dealers exist in many areas; or dealerships that do not check credit for a vehicle purchase. These dealers usually require a down payment and a monthly payment arrangement to pay off the car within one year. Subprime financing, which offers high interest rate loans to risky buyers, may also prove an option. These lenders exist locally and online. You may also pursue a loan using a co-signer, or find a person with good credit and sufficient income to secure your loan.

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How to Refinance a Lease

Items like new cars and equipment can be leased instead of purchased. A lease usually allows a consumer to purchase something for a short time period with a low down payment amount. At the end of a lease, the consumer is presented with a buyout amount and has the choice to pay the buyout amount and assume ownership or return the item to the company. A consumer can refinance a lease into a loan, but the buyout amount must be included in the loan. This means that the consumer ends up owning the item.

Instructions

1

Gather a current lease statement and the original leasing contract. If you manage your lease online, log into your online account.

2

Get the payoff amount for the lease either online or from a statement. If you cannot find the payoff amount, call the leasing company using the customer service number listed on the statement.

3

Look into the details of the contract for the buyout amount. This will be the large balloon payment that is due at the end of the lease if you wanted to purchase the equipment at lease end.

4

Add together the payoff amount and the buyout amount. This is the total amount you will need to refinance.

5

Contact lenders or local financial institutions to inquire about a loans to refinance your lease. Online quote websites, such as MyAutoLoan.com, can be used to get multiple loan quotes at the same time.

6

Choose a lender and submit a loan application. Wait for approval and dispersal of funds, and then pay off the lease. Then you will only have the new refinanced terms to pay.

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Florida's Laws on How a Repo Works

During periods of high unemployment, repossession agencies benefit from increased profits as increasing numbers of vehicle buyers default on their car loans or title loans. In Florida, title loan lenders and car loan lenders can repossess their collateral without providing notice to borrowers. However, they must comply with the state's redemption and licensure laws requiring them to obtain proper licensing allowing them to operate as title loan lenders or as vehicle finance lenders.

Voluntary Repossession

Voluntary repossessions occur when borrowers default on their loan obligations and voluntarily return their vehicles to lenders before lenders hire repossession agencies. According to the Florida Attorney General's Office, voluntarily returning a car to the lender may reduce the borrower's overall expenses. As a result, the total fees she may pay to redeem her vehicle will be less than if the lender involuntarily repossessed her vehicle.

Involuntary Repossession

Florida law allows lenders to involuntarily repossess their vehicles without providing advance warning and without first obtaining a legal judgment for repossession. However, the state's law restricts the method of repossession and the right of resale. Repossession agencies and creditors cannot "breach the peace" by engaging in violence or by threatening physical harm. If they resort to using these illegal activities, borrowers can sue them for damages.

Right of Resale

Florida law requires lenders to conduct "commercially reasonable" auctions or sales, and they must sell their vehicles at reasonable rates. Since Florida law also allows lenders to obtain a deficiency judgment for the deficiency amount remaining after the resale, lenders cannot deceptively underprice their vehicles. In other words, since a lender can sue the borrower for the difference between the sale amount and loan delinquency plus incidental costs, it must not unreasonably underprice its asking price. Lenders must return any profits made over the delinquency to borrowers within 30 days.

Consumer's Rights

A Florida consumer has the right to retrieve his personal belongings remaining in the vehicle, and the creditor is obligated to provide a written accounting of personal property found within the vehicle. Additionally, Florida law requires creditors to contact borrowers to notify them after repossessing their vehicles and providing them with advance notice of the place and time of public auction. For private sales, lenders must notify borrowers of their final date to pay their delinquencies before their vehicles are sold. Consumers have a right to demand sale of the vehicle if they are unable to exercise their rights of redemption. Consumers also have rights to ask courts to deny lenders' deficiency judgment suits if either lenders or their repossession agencies violated the state's peace laws.

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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How to Return a Car on Credit

Returning a car that you financed and are still making payments on is called voluntary repossession, according to bills.com. Usually, consumers who seek voluntary repossession have fallen behind in their payments and realize they no longer can afford the car. Rather than wait for the lender to repossess it, the consumer decides to return it himself. A voluntary repossession and a regular repossession will have the same negative impact on your credit rating. Both will be listed on your credit report as repossessions, and will remain there for seven-and-half years.

Instructions

1

Consider other options first. Can you protect your credit rating by selling the car or earning extra money to afford the payments? If those options aren't possible, prepare to return the car to the lender. The main benefit of a voluntary repossession, according to bills.com, is that costs associated with the process are often significantly less than those associated with a forced repossession. In a forced repossession the lender incurs costs such as hiring a tow truck operator to find your car and take custody of it. The lender can then file suit against you to recover that cost as well as related fees associated with the repossession.

2

Find the customer service telephone number for your lender by checking one of your statements. Dial the number and ask for the automotive loans department. Explain your situation and tell the representative that you are seeking a voluntary repossession of your car.

3

Make sure you fully understand the terms of the voluntary repossession and what will happen. Ask the representative to explain the entire process. Even in a voluntary repossession the lender has the legal right to collect any balance remaining on the debt after the car is sold at auction or to another private buyer, according to bills.com. The remaining balance is called a deficiency balance. The lender could grant you a payment plan to repay the deficiency balance or he could file a lawsuit.

4

Make arrangements with the representative to turn over the car. Remove all your personal belongings and follow the lender's instructions for surrendering it. Sign the required paperwork when you surrender the vehicle and await further communication with the lender regarding any further financial responsibility.

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Benefits of Leasing and Buying a Car

Depending on your annual driving habits, your vehicle needs and your credit standing, a lease or a purchase may prove beneficial. Leasing does not make financial sense for everyone, although it may appear beneficial because of its cheaper payment or short-term ownership. Before pursuing either option, consider which one is financially beneficial or most suitable for your driving habits.

Future Market Values

Leasing payments are based on a vehicle's expected depreciation. Once the lease is over, the bank resells the leased vehicle for the purchase amount that's stated in your contract. Future market value is predetermined at the beginning of your lease. If the leasing bank assumed the car's future value incorrectly, it assumes the loss. Even if your vehicle drops significantly in value, the bank loses money, not you. If you purchase a vehicle, you assume all risk for future market value when trading or selling the car in the future. Purchasing the vehicle may prove beneficial if the car holds its value.

Payment

Both leasing and finance purchase options offer payment benefits. If you intend to lease, you're only paying towards depreciation. You do not have to pay more toward your monthly payment amount. If financing the vehicle, your payments may prove higher, but you are paying for vehicle ownership. You can increase your monthly payment or pay off your loan early if you prefer. Paying more toward a vehicle finance decreases your loan payoff amount, so you can trade in or sell your vehicle sooner.

Interest and Fees

Both leasing and finance purchase options require an interest rate, unless you obtain zero-percent financing. Interest is charged to auto loans on a daily basis, known as a per diem, which is based on your monthly loan amount. Making extra payments toward your loan's principle amount decreases the interest paid back over the term of the loan. Leasing can result in various fees charged by the leasing company, such as wear and tear, early termination or over mileage fees. If you properly maintain your vehicle and abide by your contract, leasing is beneficial. Purchasing the vehicle eliminates any risk of these fees.

Insurance Considerations

Expect to be required to purchase a full coverage insurance policy for your vehicle whether you are leasing or purchasing. Leasing banks often require an additional gap insurance policy. In the event that your vehicle becomes a loss from theft or an accident, your insurance company pays your lender for the vehicle's market value. Gap insurance pays for the gap between the vehicle's market value and the bank's loss. As long as you don't pay your entire lease upfront or provide a large down payment, your loss is minimal. If financing, your lender will return any excess insurance payment after the loan is paid off, which is worth your consideration if you plan to offer a large down payment.

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What Credit Score is Required to Get 0% on a New Car Loan?

If you are in the market for a new car and you plan to finance the deal, then you probably know that a number of financing companies who work with the car manufacturers offer zero percent financing for the duration of the loan. Interest free financing is like money in the bank: you pay principle only while incurring no interest charges. Though zero percent consumer financing is available, the advertising fine print stipulates that this offer is only good for qualified buyers. Dig deeper and you learn that means people who have good credit.

Credit Scores

Before we look at what credit score is required to get 0% consumer financing, you need to understand what goes into your score in the first place. The Fair Isaac Corporation (MyFico.com), a business who sets the standard for scoring consumers creditworthiness, offers details about what goes into a credit score.

Your credit score consists of five components: payment history, amounts owed, length of credit history, new credit, and types of credit used. Certain components are more important than others, but collectively they determine your score. That score helps lenders decide whether to extend credit to you and for what terms (interest rate, down payment and length of loan).

The three credit reporting bureaus--Equifax, Experian and Trans Union--base their scores on Fair Isaac Corporation data, though there are slight variations in the way they calculate and arrive at these scores. Obtain your latest credit score from one or more of the credit reporting bureaus to determine where you stand.

Lenders

Banks, credit unions and other lenders offer consumer loans with varying interest rates. When it comes to car loans, the car manufacturer typically offers a loan through their consumer financing arm. For example, Ford Credit finances purchases of many new Ford, Lincoln and Mercury models. Similar arrangements exist throughout the industry.

Required Score

The base credit score that lenders require to offer you zero percent financing is not exact and fluctuates. Edmunds.com, a consumer site designed to help buyers get a fair deal on their new or used car purchases, identified Tier 1 borrowers (those with top credit) as having a credit score of 720 or above.

The required score can fluctuate as lenders tighten lending requirements when the economy is in the recession or loosens them during an economic boom. Contact your lender directly to learn what their current requirements are for you to receive zero percent consumer financing for your new car loan. Consider taking the cash rebate instead of the loan deal if the money offered is generous.

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How to Write Up a Bill of Sale in Massachusetts

If you are selling a car on your own in Massachusetts, you need to have a bill of sale form for the vehicle. A valid bill of sale form is required for the buyer to register the vehicle in the state. A generic bill of sale form cannot be used, unless it is valid for all 50 states. This is because the Massachusetts Registry of Motor Vehicles Department has specific requirements as far as what information needs to be on the bill of sale form.

Instructions

1

Use a computer word processing program, or a piece of paper, to start your bill of sale. It should say "Bill of Sale" at the top of the document.

2

Include all of the information required by the Massachusetts Registry of Motor Vehicles Department, or RMV. RMV bill of sale requirements are the name of the buyer, the name of the seller, the address of the buyer, the address of the seller, the date of purchase, the purchase price, the car make, the car model, the car year, the VIN, the seller signature and the buyer signature. You can leave blank the information you do not have if you are creating your bill of sale before the actual sale.

3

Include a statement that you are selling the vehicle in "as-is" condition to exempt you from any liability in the future.

4

Print out your bill of sale form once you have created it on your computer, if you are not writing it out by hand. Fill in any missing information that you did not have once you sell the vehicle.

5

Make a copy of the completed Massachusetts bill of sale. The buyer gets the original and the seller gets the copy.

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