What Does It Mean When a Delinquent Auto Loan Account Is Charged Off?

Any account delinquencies can have a negative effect on your credit report. However, auto loan delinquency can be particularly problematic, because its a secured debt. Unsecured debt, such as credit cards, doesnt have a piece of property to back it up if you default on your payments. Secured debt, such as home and auto loans, has your home and auto to back it up -- a fact your bank knows well.

Definition

When an account is charged off, whether its a delinquent auto loan or otherwise, it doesnt mean that you no longer owe any money. Instead, it means the bank servicing the auto loan has written the loan off as a bad debt because youve been so delinquent in paying it. Its no longer part of its accounts, and the bank is free to send either an in-house collection agency or a third-party collection agency after you to recover its money.

Timing

Creditors have different amounts of time after which they charge off your account. Consult with your bank to learn its specific policies or consult your copy of the papers you signed when you took out the auto loan. The time may range from 90 to 180 days. Another important time frame to keep in mind is how long a charge-off of any kind can stay on your credit report legally. According to the federal Fair Credit Reporting Act, a charge-off can stay on your credit report for up to seven years after the date of last activity.

Effects

Having charge-offs on your credit report can make it difficult to obtain additional credit, especially if you havent made any effort to pay them off. Since the item in question is an auto loan, you also run the risk of having your auto repossessed if the loan gets charged off. The bank technically owns your auto and is holding the title in trust for you until you pay the loan off. If you renege on your agreement to pay the loan, your bank is under no obligation to honor its part of the agreement, either.

Considerations

Each state has its own rules about the statute of limitations allowed for collection of funds on charged-off accounts. These rules may vary for secured loans -- such as your auto loan -- and unsecured loans such as credit cards. Check with your state government to find out the most current laws regarding financial statutes of limitations. Also, the date of last activity means just that. If you enter into a payment agreement with a collection agency to bring your account current, each new payment is considered the last activity. In general, its advisable to pay your auto loan as consistently as possible so you can eventually own the vehicle. However, financial expert Suze Orman advises that if a charged-off debt is close to reaching the statue of limitations, you may be better off financially by lying low and letting it slide unpaid. If youre uncomfortable with this idea, she advises you to consult a lawyer to see about reaching a settlement with the creditor in question to pay all or part of what you owe on terms that are favorable to your current financial situation.

Read More

The Benefits and Pitfalls of Leasing Cars

Leasing is a way to finance the acquisition of a new or used car. With a lease, you do not pay for the complete purchase price of the vehicle; you pay for how much you have used the vehicle. It is essentially a long-term car rental. You must determine if a lease is right for you, or if you would be better off buying a vehicle.

Benefit: Lower Up-Front Costs

Often with a lease, the dealer will not require a down payment. With many leases, you pay your first month's payment and a security deposit before you drive off. You may have to add in a few fees, but it should still be less than you would have to pay for a new car. In most states, you will see a sales tax savings because tax is paid on each payment, not the entire purchase amount.

Pitfall: High Surrender Fees

When you first lease a car, the salesman will tell you the benefit you will receive from just being able to drop off the car and move on. It sounds so simple. Be careful. You can end up with some high surrender fees on many leases. You may be charged a fee for every mile over your allotted mileage. Some leases also have lease termination fees that they charge just for the privilege of walking away. Some leases also require you to have a new state safety inspection before you can walk away. You will need to have any repairs completed that are required for this inspection.

Benefit: You Drive a New Car More Often

With a lease, you can arrange to drive a new car every two to three years. Models change quite a bit in that amount of time, and with a lease you can always be driving a new up-to-date vehicle. For some people, this is extremely important. Your vehicle generally stays within the manufacturer's warranty, reducing your cost of repairs and the risk of breakdowns.

Pitfall: You Never Truly Own Anything

This might not seem like a problem to you right now, as you can always just pick out a new car when the lease is over. But in three years, you could feel very differently, and your entire financial situation could change. What if you no longer qualify for credit when it is time to get a new vehicle? You could be in trouble. Also, when you are purchasing a vehicle, eventually the payments stop and you still have a vehicle to drive.

Read More

How to Get Back a Cash Deposit When Buying a Car

Car dealerships will not keep your deposit if you purchase a vehicle, but if you want your money back from a dealer or private seller after deciding you no longer want the car, you should read over your receipt to see your rights. Have the seller write "deposit refundable if buyer changes mind" on your receipt, or pay with a credit card so you can dispute the charge, if necessary, with your credit card company. You need to know how you can get your deposit back when shopping for a car.

Instructions

1

Reduce your purchase price by the deposit amount if you intend to buy the car you left a deposit for. If you are worried about the seller not returning your deposit amount, just subtract it from the purchase price. If you're buying from a dealership that provides your loan, refuse to sign your contract until the loan amount reflects your deposit refund.

2

Leave your deposit on a credit card. If the dealership won't refund it, call your credit card company to dispute the charge. If you left the deposit by check and it hasn't been cashed yet, stop payment on the check by calling your bank.

3

Do not leave a deposit without obtaining a receipt, especially if you're leaving cash. Ask the seller to state that the deposit is refundable. If he refuses, do not leave the deposit.

4

Ask to speak to a sales manager before taking further action if a dealership will not refund the deposit. Tell the sales manager you will contact your state's Better Business Bureau division. Also say that you will put in a complaint with the division of your state's motor vehicles department that handles dealerships. You most likely will receive your deposit back if you know whom to send your complaint to.

5

Call your state's motor vehicles department if a dealership does not return your deposit, and make sure the dealer knows you've done this. Because the state regulates dealers, making a phone call asking for an investigation can motivate or require a dealership to refund your deposit immediately.

6

Check with your county's small claims court to take further action if none of the previous methods were effective. However, if the dealership ordered a vehicle for you, or you drove it during the time your sale was pending but changed your mind, the dealer may be legally entitled to keep your deposit or a portion of it.

Read More

Auto Leasing Pros & Cons

A car dealership will often offer a customer the choice to purchase or lease a car. With a car lease, the customer receives the right to operate the vehicle for several years while making payments on it. At the end of the lease term, the customer may decide to purchase the vehicle or return it and buy or lease a new car. Both a purchase and a lease have advantages and disadvantages.

Convenience

One advantage of an auto lease is that it allows the car buyer to avoid getting stuck with an older vehicle that is difficult to sell. A buyer who purchases a more expensive car may still want to buy a new car in five years, so the buyer will have to sell or trade in the old car. With an auto lease, the buyer can simply return the vehicle and let the dealer worry about selling the used car.

Lease Conditions

A car lease places conditions on the buyer. It often restricts the number of miles the driver may drive the car each year. According to the Federal Reserve, a typical mileage limit is 12,000 to 15,000 miles per year. The driver must also maintain the vehicle in good condition, which includes following the automaker's recommended schedule for oil changes and maintenance, or the driver must pay additional charges at the dealership when returning the car.

Monthly Payments

One advantage of leasing a car is that it is cheaper than purchasing a car. Since the lease payments are typically lower than the purchase payments on a new car, the buyer can either make smaller payments or drive a fancier vehicle for the same price. A lease only requires a buyer to pay a portion of the car's full value, but a purchase requires the buyer to pay the entire principal value of the car upfront or over a period of time.

Ownership Advantages

A benefit of a purchase is that once a car buyer purchases a car, the car buyer owns the car. The car driver can drive the car an unlimited amount of miles in a year. The car driver can also delay maintenance, get into accidents and cause additional damage to the car without incurring any additional liabilities to the dealership. A car buyer who plans to keep the car for more than a few years usually saves money by purchasing the car outright.

Down Payment

A disadvantage of a car purchase is that it often requires a large down payment to avoid high interest charges. A lease will still require a down payment, but it will be smaller than the down payment for a purchase. A customer may not qualify for a loan to purchase a vehicle, yet qualify to lease the same vehicle.

Read More

Can They Put a Lien on My House If They Repossess My Car?

There are two legal components to an auto loan. The first component is your unconditional promise to repay the money you borrow. The second component is a lien on your car that you grant to the lender as security for the loan. When a lender repossesses your car, it may not be worth enough money to pay off the full amount of the loan, which could result in further legal action, including, potentially, a lien on your house.

Repossession

Repossession is the lender's exercise of its lien on your car. The lender has the right to take your car back and sell it, then use the money earned to pay off as much of your loan as possible. In many cases the car does not sell for enough money to pay off the full balance on the loan. The amount remaining unpaid is called a deficiency, and you are legally responsible for repaying the deficiency even though the lender has already repossessed.

No Automatic Lien

While an auto lender may potentially obtain a lien on your house, the lender does not have an automatic lien on your house like they do on your car. The lender must go through an extensive legal process before a lien on your house even becomes a possibility.

Deficiency Judgment

A lender can file a lawsuit against you to recover the deficiency that you still owe after a repossession. You can defend yourself in that lawsuit by arguing that the lender has understated the value of your car and that you don't actually owe a deficiency. Ultimately, either a judge or jury will decide whether you are liable for the deficiency. If the court finds you liable then the lender will get a judgment ordering you to pay the deficiency amount.

Judgment Lien

If you still refuse to pay the deficiency even after the lender obtains a judgment against you, then the lender can exercise the judgment by obtaining a lien on your house. In most states, the lender can create a lien by simply filing a copy of the judgment in the county land records for the county where your home is located. Additionally, the lender can ask the sheriff's department to hold a sheriff's sale on your house. The sheriff will sell your home in a public auction, pay off all liens on your house and then return the excess money to you.

Read More

Can a Vehicle Be Financed for an Amount That Is Greater Than Its Value?

When taking out a loan on a vehicle or real estate, the lender will determine your loan to value ratio, defined as the amount of the loan compared with the worth of the property. Value includes the vehicles fair market value minus the equity you have in it. You can finance your vehicle for more than you paid for it under limited circumstances through institutional lenders, but most dealers are reticent to offer such deals.

New Vehicles

Some car dealers will roll over fees onto the amount of a vehicle loan, which can leave you with a note worth more than the purchase price of your vehicle. These rolled over charges can include transfer and trade-in taxes and title, registration, documentation and advertising fees. Dealers typically only offer these loans to the most creditworthy borrowers. They mitigate their risk of issuing a loan greater than the value of the vehicle by offering you a higher interest rate or fewer discounts.

Refinancing

If you have trouble making monthly payments to a dealer, you may use a lender to refinance your vehicle loan. Refinancing will replace your existing loan terms with a different interest rate and monthly payment. You will usually finance your vehicle for the remaining value of your vehicle loan. Because most vehicles depreciate 10 percent to 20 percent in the first year of ownership due to obsolescence and use, the fair market value of your vehicle is typically higher than the existing balance of your loan.

Considerations

If you purchase a vehicle with a high resale value and have excellent credit, a select few lenders may offer you a loan in excess of the vehicles fair market value. For example, Wells Fargo allows customers to take out a loan on the value of their vehicle up to a 160 percent LTV ratio. This means that a vehicle worth $10,000 can be financed for $16,000. These loans carry a high risk of default, and banks have a lower risk of recovering their loan due to depreciation and wear. You will have to shop around, because most lenders will only allow up to a 80 percent LTV ratio.

Kickbacks

When you purchase a car from dealers, they usually offer promotional offers that can include cash back at signing. For example, a dealer may offer 0 percent financing or 4 percent financing with a few thousand dollars cash back. If you choose the latter option, you are essentially financing the vehicle for more than its value, because you will receive cash upfront but pay more in interest over the life of the loan.

Read More

What Percent of My Income Should I Spend on a Car?

Buying a new car can be fun, frightening, exciting and a whole host of other emotions. Sometimes, we get caught up in the moment and end up in a car that could be impractical for our needs, too much money for us to spend or both. Before shopping for a car, it is important to determine how much we can spend.

Determine Your Spending Limit

Figure out how much you personally can spend each month on a car payment, if you are getting a car loan. The bank may qualify you for more than this amount, but the bank doesn't know how much you spend on food, whether or not you have a hobby you love that you spend money on or how much traveling you do for your daughter's soccer games. You need to come up with a monthly amount that you can spend without breaking your budget. Experts say that your monthly debt-to-income ratio (not including mortgage) should be no more than 20 percent. You can add up all of your debts and see where you fall. If you are already over that percentage, it may be wiser for you to save up and pay for a car with cash.

The bank or finance company will determine your debt-to-income ratio. This does not include your rent, food, utilities or those types of expenses. This is how much you owe in debt compared with how much you take in each month. While this will tell the bank about your debt, it doesn't help you if you have extensive bills in other areas.

Add up all of your monthly bills and include money for savings in the equation. Find out for what amount the bank will approve you. Let them know what monthly price range you are looking at and only look at those cars--do not be tempted otherwise.

Remember you will be paying for tax, title and registration, in addition to the car itself (often these things are rolled into the loan). You will also have the additional expenses of gas, insurance and maintenance on a new (or new to you) car. Be sure your monthly budget can handle these additional expenses.

Read More

How to Transfer Auto Lease Paperwork & Documents

For individuals who lease a car, selling the car is impossible, because they do not own the title. If the individual attempts to terminate the lease, he will have to pay penalties. The only way to avoid penalties and to get rid of a leased car is to transfer the lease and documents.

Instructions

1

Read through a copy of your lease to determine if the lease youve signed allows for a transfer. If you cant find the lease or are unsure, contact the lease company and ask a representative if another party can assume your lease. Find someone who is interested in assuming your lease.

2

Direct the new buyer to fill out a credit application at the leasing office. If the credit application is approved by the leasing company and your lease can be assumed by another individual, the individual (and you) can begin the process. Notify the leasing company that you have an interested buyer who would like to assume the lease and who has filled out a credit application through the company, which has already been approved.

3

Set up an appointment with the leasing company and the new buyer to fill out the remaining paperwork in order to assume or take over your lease. Meet the new buyer at the office for the appointment so that you can both fill out any necessary paperwork together. Bring all of your current leasing paperwork and drivers license with you, as well as at least one other form of identification (such as a social security card or a passport).

4

Give the car and all keys and accessories to the new lessee once the paperwork is completed, so that the individual can begin driving the car and making all future payments. Notify your insurance company that someone else has assumed your lease and that you no longer wish to insure the car.

Read More

How to Use a Secured Loan Calculator

A secured loan is a loan that is "secured" or "backed" by a borrower's collateral. The collateral can be anything from a car to a home. It will be forfeited to the lender if the borrower does not repay the loan. A secured loan calculator can help you estimate your interest and the monthly cost of the secured loan.

Instructions

1

Find a secured loan calculator online. Use your favorite search engine and search for "secured loan calculator." Pick the one you are most comfortable with.

2

Enter the loan amount that you want to borrow. Do not add a dollar sign.

3

Input the terms of the desired loan. Usually, you will have to pay off a secured loan in monthly installments.

4

Add the interest rate. The interest rate for a secured loan is usually much lower than the rate for a non-secured loan, but your credit score and history will determine the interest rate.

5

Click on the "Calculate" button. This will give you your estimated monthly payment and may be divided into amounts such as interest paid, cumulative payments and principal remaining.

Read More

The Disadvantages of Buying a Car

Buying a car is one of the biggest investments you may ever make; therefore, you should consider both the advantages and disadvantages. If you can get around conveniently without a car, it may be in your best interests to save the money you would've spent on a car and put it toward a mortgage, other investments or retirement. The appeal of car ownership may be enticing, since you can modify the car in any way you want and eventually make some money selling it, but generally, a car won't yield a return anywhere near what you paid for it.

Bad Credit

Monthly car payments can be very expensive, especially if you have poor credit. When buying a new car, you need to set aside money for a large down payment, and factor monthly payments into your budget. If you have other expensive bills or debt, a car payment will only add to your financial troubles--and if you're late on your car payments, this will only further hurt your credit.

Depreciation

Depreciation is the term for your car's decrease in value over time. Regardless of how well you maintain your car, it will inevitably depreciate starting the minute you drive it off the lot. If you don't plan on keeping your new car until you've paid it off, it makes more financial sense to opt for a used car.

Warranty Expiration

When your warranty expires, you are financially responsible for car repair expenses. These can quickly add up, especially your car is older or if you don't regularly maintain it.

Auto Insurance

If you own a car, you must be insured in order to protect yourself from expensive repairs due to accidents. While the cost of insurance varies depending on what type of coverage you have, you can expect to pay a few hundred dollars a year to insure your car--an expense you wouldn't need if you opted instead for other forms of transportation.

Used Car Quality

If you're considering a used car, exercise great caution before buying it. Hire a mechanic to do a vehicle inspection to make sure there are no serious problems. You can also expect to pay more for maintenance with a used car, though you may pay less for insurance.

Read More

Can You Void a Vehicle Contract by Not Taking Possession?

The "New York Times" reported that in 2011, the average price of a new vehicle purchased in the United States was close to $30,000, while the average price of a used vehicle of one to three years old was a little over $23,000. With the rising price of new and used cars, it is no surprise that many consumers experience some form of buyer's remorse and look for ways to cancel the purchase. However, canceling a car purchase may not be possible, and when it is, it may not be as easy as some people think.

Right to Cancel

Contrary to widely held belief, there is no federally mandated right for a consumer to cancel a vehicle purchase within a three-day period, once the sales contract has been signed. Some states may offer consumers some form of cooling-off period. For instance, in California, dealers are required to offer, for purchase, a two-day right to cancel for used vehicle sales of $40,000 and under. Unless your contract has specific language providing a right to cancel, you are the owner of the car once you sign all of the documents. The dealer is under no obligation to take the car back if you change your mind, even if you choose not to drive the car off the lot.

Dealer-Offered Cancellation Provision

Some dealerships will offer customers a right to cancel a purchase of a vehicle. You will need to review your purchase agreement to see if this right applies to you. Dealers that offer a right to cancel will often have stipulations stating that you will forfeit any deposits you may have paid, or may have to pay a restocking or processing fee.

Financing Falls Through

If you are financing your vehicle purchase through the dealership, you may be able to walk away from the purchase if the financing is not finalized at the initial point of sale, or the terms are changed by the dealer. For example, a dealer may allow a buyer to drive a car home while awaiting final approval of the financing. Within a few days the dealer contacts the buyer and lets the buyer know that the original terms were not approved and the buyer must bring the car back to the dealership, where the buyer would need to agree to a higher interest rate or less favorable terms to be able to keep the car. In this instance, you should be able to return the car, with the dealer required to return applicable deposit and trade-in.

Negotiating With the Dealer

If your situation has changed, attempt to negotiate with the dealer to see if the dealer will allow you to back out of the deal. Since there is often no legal mandate requiring the dealer to allow you to cancel, you will need to rely on the dealer's goodwill toward you and your situation to negotiate a successful outcome.

Leaving the Car

If you choose to leave your vehicle at a dealership after you have signed your sales contract, this may be considered a voluntary repossession on your part. A voluntary repossession will negatively affect your credit situation and does not necessarily absolve you of all financial responsibility for the car. The lien holder may attempt to collect the difference between what you owe and what the car ultimately sold for.

Read More

How to Deregister My Pennsylvania Vehicle After I Donate It?

In some states, once you sell or donate a vehicle that you have registered, you must let the state know that you no longer have the vehicle. Usually you must fill out a notice of liability release. However, Pennsylvania is not one of those states. The closest thing you can do to de-registering a car in Pennsylvania is turning in the license plates. You cannot complete a notice of liability release in Pennsylvania, but you can still protect yourself from any liability.

Instructions

1

Sign your Pennsylvania car title in the presence of a notary.

2

Make a copy of the front and back of the notarized title to keep for your records. Since Pennsylvania does not perform liability releases, you may need these copies if you start to get citations in the mail for the vehicle.

3

Send your license plates from the donated vehicle to the Pennsylvania Bureau of Motor Vehicles, if you are not transferring the plates to another vehicle. You can mail the plates to Bureau of Motor Vehicles, Return Tag Unit - 1st Floor, 1101 South Front St., Harrisburg, PA 17104.

Read More

How do I Get the Best Rates On an Auto Loan?

In order to get the best rate on an auto loan you need to do some advance work and be prepared to talk to several lenders. You shouldn't rely on the dealer to secure your financing for you, according to the Federal Trade Commission (FTC). A dealer will try to push you into an agreement that makes him more money either in commissions from the lender or additional fees he adds to your purchase contract. Save money by learning how to get the best rates on an auto loan on your own.

Instructions

1

Determine how much money you can afford to spend on a vehicle by researching vehicles you are interested in and using a loan calculator to estimate what your monthly payments would be. The Internet is a valuable tool for this preliminary work. Remember that the loan calculator is only an estimate, so use that as a general guideline rather than counting on it to be exactly what you will pay. Your actual monthly payment may be less or more than the calculator estimate. Consider purchasing an energy-efficient vehicle as lenders are offering slightly lower interest rates on vehicles with good mileage, according to online financial resource Bankrate.

2

Calculate how much money you can afford to put down on your vehicle purchase. The more you can put down on your vehicle, the better your chances of getting a lower interest rate. A down payment of 20 percent of the purchase price is a good guideline to follow, according to online auto resource Edmunds.

3

Shop around at various banks and credit unions. Make appointments with loan officers to make sure you are able to negotiate your deal directly. For the sake of comparison, you should apply for at least two online auto loan quotes. This will give you some solid numbers to use when negotiating with banks and credit unions.

4

Consider lenders that are offering auto loan promotions. It is not unusual for lenders to try to entice new borrowers with low rates on auto loans. Use that to your advantage and make those new vendors part of the list of financial institutions you visit to shop for your loan.

5

Use lenders against one another. If you are speaking to a lender who is not giving you a lower rate than other lenders have given you, show him the offers you have received and challenge him to beat those offers. Competition among lenders can work in your favor.

Read More

Repayment Laws for Auto Reposession

In the United States, automobile repossession laws are mandated at the state level. If your car was repossessed and resold by your creditor, you must repay the difference on the car loan, which is known as a deficiency. In most states, you also have the option to buy back the vehicle from the creditor before it is resold.

State Laws

When it comes to repossession law, each state provides specific instructions on both consumer and creditor rights to repayment. To find your state's individual repossession repayment laws, consult a consumer attorney or peruse your state's laws directly on your state legislature website. For a link to all state legislature websites, visit the National Conference of State Legislatures. For legal help, check out the National Association of Consumer Advocates.

Buyback Options

In most states, you have the right to buy back your vehicle before the creditor resells to a third party, which usually occurs in a private sale or public auction. Some states will force the creditor to give you a buyback deadline, while other states allow the creditor to sell without your notice. If you do decide to buy back the vehicle, your state law will dictate the amount you must pay to redeem your vehicle. Depending on your state law, you may pay your creditor the full loan amount, only the overdue amount, or some percentage of the total, plus repossession charges. Another option is to bid on your vehicle at auction, but only if your state allows this buyback procedure.

Waived Deficiencies

If you voluntarily return your automobile, you will still owe your deficiency on the car loan, but you will not be charged any repossession charges, such as the repo man's fees and towing expenses. Whether you voluntarily returned the vehicle or it was taken by your creditor, some states will waive your deficiency automatically if the total amount does not exceed a preset limit.

Considerations

If your creditor did not resell your repossessed automobile in a commercially reasonable manner, failed to warn you before or after the repossession took place, or refused to return the personal property left in your vehicle, consult your state's repossession laws for your legal options. Depending on your state's law, you may have the right to sue your creditor to reverse or lower the deficiency. You may also take the creditor to court if the repo man breached the peace, which usually includes threats of violence, taking your vehicle without your permission or entering certain areas of your property that are off limits.

Read More

How to Price a 2007 Ford F550 Dump Truck

The 2007 Ford F550 dump truck is a medium-duty vehicle with a gross combined weight rating of 33,000 pounds. The truck was made in both a V8 and V10 engine option. The base price for the new Ford F550 chassis cab was just under $30,000 in 2007, with the full dump truck having a higher price. As of March 2011, used prices range between $24,000 and $36,000. If you are looking to buy or sell a used Ford F550 dump truck, the current market value must be determined so that you can determine a good price point.

Instructions

1

Get as much information as possible on the specific truck that you want to price. For instance, if you found a truck you want to buy, get the mileage, type of engine and any other information you can on it. The more information you have, the more accurate pricing information you will end up with. If you can drive the dump truck, do it so that you can assess if it has any noticeable mechanical problems, which would lower the value.

2

Subscribe to a blue book service about medium-duty and heavy-duty trucks, such as Truck Values or Truck Blue Book (see Resource section), to get the blue book value of the dump truck. Unlike those for passenger vehicles, these services are not free and have a subscription fee, which varies by vendor. This may only be a good option for you if you will be buying more than one vehicle and get more than one use out of the service. With each of these services, you enter in the dump truck details to get a value amount.

3

Browse sales listings for other used F550 dump trucks to see how others are pricing the trucks. You can look on sites such as Truck Trader, Commercial Truck Trader, Trucker and eBay Motors (see Resource section). Look for truck listings that closely match the truck you are trying to price. For instance, if you want to price a V8 engine truck, do not look at the prices for the V10 engine models. Use the prices you see as a guide for pricing your 2007 Ford F550 truck.

Read More

How to Get a Better Payoff Amount on Your Vehicle

When paying off a car loan, you minimize the loan's interest amount, which can save you thousands of dollars if you pay the total loan balance in full. Otherwise, obtaining a lower payoff amount is difficult, as you signed a contract that states you'll pay the loan's full balance. You might convince your lender to take less than the full payoff amount if you pay your balance in full. Or, you can renegotiate your loan terms by applying for a lower interest rate and shorter term, which also decreases your total pay back amount.

Instructions

Paying Your Balance in Full

1

Review your finances and determine if paying off your auto loan in full is a possibility. If so, call your lender.

2

Discuss your loan pay off amount with a lending representative. The representative will initially state a payoff amount that excludes interest. Ask the representative if the lender can decrease the payback amount if you pay the total balance at once.

3

Wait for a decision from your lender, as the representative may have to speak to another person regarding your loan account. If the lender accepts your offer, make your payment as per the lender's instructions.

Refinancing for Better Terms

4

Call your lender to discuss your loan terms. If you're unable to pay off your loan balance with one single payment, aim to decrease your total payback amount by lowering your interest rate and decreasing your term.

5

Ask your lender if better interest rates are available. If not, you can search other providers and refinance your loan with a lender who offers better rates.

6

Apply for the balance of your loan with your auto loan provider or another of your choice for your total payoff amount, unless you want to provide a down payment. Discuss term options with the lending representative to determine which term is most affordable and saves you money.

7

Wait for your loan approval, which can take up to one week. If approved for a better interest rate, discuss the new terms of your loan and sign your lending contracts to obtain the new loan terms. If refinancing with another loan provider, the new lender will pay off your old one after you sign your contract.

Read More

California Laws for Default Auto Payments

If you fail to make a payment on your California auto loan as required, you are considered to have defaulted on the loan. Some lenders give you a grace period to catch up on your payments, while others may not; check your contract for details. If you go into default, the auto lender has the right to repossess the vehicle.

Repossession Rights

If you miss even one auto payment in California, your lender may have the right to repossess the vehicle. Repossession terms must be spelled out clearly in the contract; if it says that the lender may repossess after the payment becomes 30 days late, for example, the contract gives the lender that right. Read your contract carefully before signing to make sure you understand what will happen if you miss a payment.

Private Property Exception

As of the time of publication, it is legal for California repossessors to enter private property to repossess a vehicle. Thus, the repossessor may go up your driveway or cross your lawn to repossess the vehicle. However, repossessors may not enter a locked building or fenced-in area without the property owner's permission. Thus, if your vehicle is in a locked garage, the repossessor cannot break the lock to get to your vehicle.

Concealment Prohibition

It is against the law in California, as of the time of publication, for vehicle owners to hide or dispose of their vehicles to stop a repossession. In addition, you cannot interfere with the repossessor doing his job. For example, you can't jump in the car and drive away while the repossessor is attempting to take the vehicle back. If you store your car in a public garage for more than 24 hours, the garage owner must inform the police so that if you are attempting to hide the vehicle law enforcement can stop you.

Required Notifications

The repossessor does not have to notify you or law enforcement before repossessing a vehicle. However, some repossessors will do so anyway so you don't file a stolen vehicle report when your vehicle is repossessed. After the repossession, the repossessor has 60 minutes to contact the nearest law enforcement agency to inform it of the repossession. The repossessor must also notify you in writing of the repossession within 48 hours of repossessing your vehicle. If the repossession occurs on a weekend or other non-mail day, the repossessor has 72 hours to inform you.

Read More

How to Negotiate Auto Reposession

Automobile repossession is the legal authority of a lender to retrieve its collateral if the borrower defaults. Circumstances vary by situation, but in general, when a borrower misses three consecutive payments, the lender issues two documents: a Notice of Default and an Intent to Repossess to the borrower. The lender then contracts with a third party recovery service to physically retrieve the vehicle. After the vehicle is retrieved, the borrower's personal property inside the vehicle is returned, and the car sold at auction. To avoid repossession, follow a few steps.

Instructions

1

Determine courses of action that best fit your particular needs. Start the negotiation when you begin receiving collection calls. In general, the options for negotiating an auto repossession are asking that the loan term to be extended to lower the monthly payments. You can request an extension of 30 to 60 days to bring the loan current during which time no other penalties are assessed. Or you can ask that the missed payments be placed at the end of the loan. As an example, if the loan expires in 30 months and you missed two payments, those missed payments will be made after 30 months are up.

2

Prioritize your options to meet your circumstances. If you are moving from one job to another and are in a temporary bind, ask for an extension. If your income has been reduced, ask to extend the loan term. If you are starting a new job but have missed payments, ask for the arrears to be tacked onto the end of the loan.

3

Meet or phone the lender. Speak with a manager or someone who has the authority to modify your loan or grant an extension. Explain your situation and review your list of options to see which are acceptable by the lender. Once an agreement is reached, get it in writing.

Read More

How to Buy a Car With Little or No Money

When you buy a car, you are expected to put money down on the vehicle in the form of a down payment. Fortunately, however, if you don't have the cash for a down payment or to pay for a car, there are certain steps you can take to obtain 100 percent financing for the purchase. Generally, this involves qualifying for a loan and making payments on a monthly basis. When you finance a loan or buy a car with no money down, you also want to make sure you protect yourself from financial liability.

Instructions

1

Determine how much you can pay in monthly payments. If you can't afford to buy a car for cash, you will have to secure an auto loan that has monthly payments. Therefore, it is essential for you to know how much you can afford to pay each month.

2

Look for a car loan online or at a bank or credit union. This can often be less expensive than getting a loan from a dealer. Plus, if you get financing before you go to the car lot, you will know how much you can afford to spend on a car once you get there.

3

Ask about dealer financing. These types of loans are issued by the dealer, who usually works with a lender or credit union. Dealer financing may be easier to qualify for than a private car loan, but it also has a higher interest rate. Still, if you have no other way to buy a car, dealer financing on the vehicle may provide the answer.

4

Buy a car that you can qualify for financing on. If you are not eligible for a large car loan or can't afford large monthly payments, you likely will have to settle for a less expensive car. Make sure that the car is safe and reliable---otherwise you could just be buying a problem. Also read the terms of the loan carefully so there are no surprises (i.e., that the interest rate on your car loan is exorbitantly high).

5

Consider GAP insurance. This is an insurance policy you can buy for a few dollars per month and is a good idea for those who buy a car with no money down. The insurance will pay the difference between what your car insurance company gives you for the car and the amount you owe on it in the event that the car is stolen or declared a total loss after a car accident. If you don't have Gap insurance and you put nothing down on the car, you could easily end up owing more than the car is worth and thus having to pay back the loan out of your own pocket even if something happens to the car.

Read More

Leasing Vs Paying Cash for Car

Leasing payment versus paying cash for a car saves you money within the first few years, or at least for the term of your lease. While a lease payment may appear attractive, you should consider your needs, long-term finances and vehicle use to determine if the option benefits you financially.

Restrictions

During a lease, the bank owns the vehicle and you do not. Therefore, you must adhere to the lease terms that are stated in your contract. You must make repairs, follow the maintenance schedule and stay beneath the mileage allowance you agreed to. You cannot modify the vehicle in any way, either. If you pay cash for a car, you own it and are free to do with it as you please. You do not have to complete vehicle maintenance, you can drive it as much you'd like and modify it.

Warranty Period

Most vehicles come with a standard 3-year, 36,000-mile bumper-to-bumper warranty, if not more. Many leasing terms and mileage restrictions fall into this range. Because it's likely you'll turn in the car at the end of the leasing term, you do not need to purchase an extended warranty. If paying cash, you may have to consider the price of an extended warranty, if you plan to keep the car. Otherwise, you are responsible for all repairs outside of the manufacturer's warranty period, which can prove more costly than the extended warranty itself.

Lease End Options

You can purchase your vehicle at the end of the leasing term if you wish to. You can pay cash or finance the remaining money due. While this may seem like a benefit, because you can take the term of your lease to decide, purchasing at the end of the lease is likely to cost you more than it would have if you paid cash. Unless negotiated, leased vehicles are sold at the manufacturer's suggested retail price (MSRP). Many lessees are attracted to the monthly payment, and not so much the price of the vehicle.

Loss

If you pay cash for a car, you do not have to maintain a full coverage insurance policy but are required to during a lease. Full coverage policies are the most expensive to purchase. Should you total your vehicle or it becomes a total loss, you can expect to receive the full market value for it if you paid cash, assuming you carried the coverage. If you lease a vehicle, you will not receive any money towards the value of the vehicle. The leasing bank is the insurance policy's loss payee, so even if you paid your entire lease up front, the payoff amount goes to the lender.

Read More

How Low Can a Credit Score Be to Get an Auto Loan?

Auto loan providers consider various pieces of information to ultimately extend or decline a loan. Even with a low credit score, you can still obtain a loan approval. Before you apply for a loan, determine if your credit, employment, address and income information is acceptable, based on the information that lenders review.

Credit History

Lenders do not determine loan approvals based on credit scores alone. Instead, lenders review all of your past accounts and payment history. Your accounts should be current when you apply for an auto loan, meaning you shouldn't be behind on any car payments, mortgage, credit cards or utility accounts. Your credit should offer proof of established credit, even if you experienced financial hardship for a period. A lender may also ask you to prove that certain debts have been paid before approving your loan.

Personal Information

A lender may approve your loan if you have sufficient income and employment history, even with a low credit score. Expect to provide at least two years of employment and address history. The longer you've been at your job and the more money you make, the more likely you are to obtain a loan approval. However, if you are constantly changing jobs, have a low income -- $20,000 per year or lower -- and inconsistent address history, you may be declined for a loan, even with good credit. You should also have enough income to cover your monthly debt. Less debt is favorable; a good credit borrower's loan application can be declined if his debt is close to or exceeds his income.

Vehicle Value

You can still obtain a loan with a lower credit score, but it may not be for the amount you wanted to borrow. Poor credit borrowers may obtain an approval for as low as 60 percent of the car's bank-determined market value. The lender figures your vehicle's value based on its year, make, model, level, options and mileage. Based on your credit, the lender offers approves a percentage of that value. You may have to provide a large down payment to establish your loan if you have poor credit, while better-credit borrowers may obtain a loan for up to 120 percent of the vehicle's value.

Rate Differences

If applying for a new car loan through a vehicle manufacturer's bank to obtain low rate financing or a lease, good to excellent credit history is required. Manufacturer banks offer either an approval or decline the loan application; no in-between rates are offered. Lenders like banks or credit unions use a tier scale. Excellent credit warrants the best rates, but lower scores and blemished history can increase rates up to around 15 percent. Subprime lenders, who offer loans to low credit or risky borrowers, can charge up to a 29 percent interest rate in some states.

Read More

How Does Co-signing for a Vehicle Work?

When co-signing an auto loan, your credit and income secure the auto loan and terms for another person. You'll also become a co-owner of the vehicle you sign for, so the title will list both of your names. Once you sign bank contracts, you become just as responsible for the auto loan as the person for whom you co-sign, resulting in financial and credit risk if the borrower defaults on the loan.

Why a Borrower Needs a Co-signer

A borrower who can't obtain a loan approval on his own can use a co-signer for an approval. Or, if the borrower has poor or no credit, his loan approval might require a large down payment, high interest rate and restricted loan term, which results in a high monthly payment. As the loan's co-signer, your income and credit history secures the term of the loan. The borrower might obtain a lower interest rate or a less restrictive loan when using your credit to secure the loan terms.

Co-signing Process

Once you agree to co-sign an auto loan, expect to give your credit and personal information to the auto loan provider. Provide your Social Security number, name, address, date of birth, income, address and employment information for the loan application. Once approved for the loan, provide the lender or dealership with a copy of your driver's license and most recent pay stub, if required. You and the person for whom you co-sign sign loan contracts as a final step to establish the loan.

Credit Considerations

Even though you aren't the person paying the loan payment or driving the vehicle, your credit states otherwise. The credit bureaus receive note of your new auto loan account as if the loan were your own. The total amount of the loan increases your debt-to-income ratio, or the amount of debts you're responsible for versus your income. Opening a new loan account decreases your credit score until a history of timely payments and smaller balance are reported.

Risks

Depending on your income and debt responsibilities, you might not obtain additional lines of credit after co-signing an auto loan because of your debt-to-income ratio. If the borrower defaults on the auto loan, your credit score decreases. All late payments are reported on your credit report. If the vehicle is repossessed at a later date, you are responsible for paying the remaining loan balance after the lender resells the vehicle. The lender can sue you and the co-owner for nonpayment if you don't pay the balance due, which can result in wage garnishment. A repossession remains on a credit report for at least seven years.

Read More

How to Calculate the Equity in a Vehicle

Whether you are selling or trading your car in, knowing the amount of equity you have in it can mean the difference between making money or losing money on the deal. Equity is the value of the vehicle less the amount you owe on the vehicle. If you owe more than the car is worth, the value is upside-down, meaning you owe more than you can sell for and have zero or negative equity in the vehicle.

Instructions

1

Visit the Kelley Blue Book website (kbb.com) and enter the make, model and year of your car to determine the value of your vehicle. Enter the options that the vehicle has and select a condition level.

2

Call your automobile financier and ask what the payoff on your vehicle is. The payoff amount is the amount you owe on the vehicle less any remaining interest charges.

3

Subtract the amount you owe from the value of your vehicle. For example, if the Kelley Blue Book website values your vehicle at $8,000 and you owe $3,000 on the loan, your equity is $5,000.

Read More

How to Stop Auto Loan Debt Collection

You stopping payment on your car loan can trigger a repossession. After taking back a car, auto lenders might sell the car at auction. But having your vehicle sold at auction doesn't let you off the hook. If the car sells for less than you owed, the lender may begin collection to recover the deficiency balance.

Instructions

1

Discuss your financial situation with your auto lender to see if there's a chance it will forgive the outstanding balance and cancel the debt. Explain circumstances such as job loss, illness and disability.

2

Review your monthly finances to determine how much you can afford to spend repaying the debt. Talk to your lender about an installment plan early in the collection process. Propose a monthly installment amount, and then wait for your lender to accept the offer or counter with another payment amount.

3

Contact an attorney who handles bankruptcy proceedings to discuss bankruptcy options. Provide the lawyer with a list of your debts and information about your assets. Filing for bankruptcy immediately halts collection agencies and creditors from contacting you about a debt.

Read More

Do Colorado Car Loans Have a Three-Year Statute of Limitations?

The clock starts ticking on an auto loan when the first payment is received. If an auto loan is not repaid according to the terms and conditions of the auto loan contract, the lender can sue the borrower for the defaulted amount plus attorney's fees. Colorado has one of the most moderate statutes of limitations on consumer debt in the country.

Identification

Colorado car loans do not have a three-year statute of limitations. All written contracts, oral agreements, open accounts and promissory notes have a six-year statute of limitations in Colorado. Under Colorado law, lenders can only file a lawsuit in a state court for the collection of a bad debt if the statute of limitations has not expired. When the statute of limitations expires, the lender must either attempt to collect the debt outside of court or abandon the debt altogether.

Written Contracts

Colorado mandates a six-year statute of limitations on auto loans backed by a written contract. A written contract is a legally binding printed document that has been signed by a payer and a payee. Written contracts explicitly express the terms of the loan and the conditions for the repayment of the loan, including the first due date. Auto loan terms are typically 24, 36, 48, 60 or 72 months.

Considerations

According to the Cars Direct website, "Different lenders have different policies concerning how late charges are accrued for missed payments." If you've missed one or more auto loan payments and have defaulted on an auto loan contract as a result, you may still settle the debt and avoid a lawsuit. Not all lenders are willing to settle a defaulted loan for a lesser amount, but many are, depending on the default amount and age of the loan contract.

Judgments

Written contracts are easier to enforce than verbal agreements. However, the burden of proof always lies with the lender. If a lender wins a judgment for the defaulted loan, the lender must file a writ of execution to garnish a borrower's wages or place a lien on his property. Lenders can report a judgment to the three major credit bureaus -- TransUnion, Experian and Equifax -- up to 20 years later, depending on the court in which the judgment is filed. All judgments are renewable in Colorado.

Read More

How to Lower a Current Car Payment

In most households, every penny counts. As of 2009, 42 states experienced a decline in personal income, according to the Wall Street Journal. This leaves many families feeling the financial pitch more than ever. If auto loan payments make up a big chunk of your monthly budget, it might be time to trim costs. Checking out auto loan refinancing options may help drive down monthly payments.

Instructions

1

Check your credit score. If you haven't checked your credit score recently, order a free credit report online (see References). Most financial institutions use "risk-based lending." This means that the higher the credit score, the lower the interest rate. If you find credit report inaccuracies, dispute the findings with the reporting agency. This can be accomplished by filing out their online dispute form. Disputes are typically resolved within 45 business days. Resolving these issues can help boost credit scores.

2

Shop auto loan rates. Online comparison tools such as Bank Rate allow you to compare auto loan rates across the country. When reviewing rates, pay attention to the loan terms. Typically, the shorter the auto loan term, the lower the rate.

3

Negotiate with your existing lender. Losing customers is very expensive. Financial institutions would rather retain your business. Contact your lender and present them with the competition's auto loan interest rates. Ask them to lower your interest rate, which will lower your monthly payment.

4

Check out longer loan terms. Another option for lowering a car payment is refinancing into a longer loan term. With this option, you'll be paying more over the long-term (higher financing costs). However, stretching a loan term out over 60 months versus 48 months will drive down monthly payments.

Read More