October 2012 ~ Managing a Car Loan

Wednesday, October 31, 2012

What You Need to Buy a New Car

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Buying a car is a major purchase for most people. Money aside, each state has special laws that apply to car purchases with which you must comply. Apart from identifying your needs, desires and budget, buying a new car requires both money and paperwork before you can drive away in your new wheels.

Like anything else you buy, you need money to buy a car. Many people use car loans to purchase new cars, obtaining the loan either through the dealership, their bank or another lender. The loan allows you to pay the full purchase price to the seller and then make periodic payments to your creditor. When you pay for a car in cash, you use your own funds to pay for the vehicle without getting a loan. However, the term "cash" is a misnomer, as you usually need to pay with a personal check or cashier's check from your bank.

When you buy a new car, you must register it with the state motor vehicles department. To register a vehicle, you must typically take the car to a motor vehicle office and pay any applicable registration and tax fees. You must also prove that you have the adequate amount of liability insurance. Registration and insurance requirements differ between state to state.

Buying a car usually involves a bill of sale, a legal document that officially records the names of the buyer and seller and the kind of car sold. Bills of sale must be recorded by a public notary. A notary serves to officially recognize the document and identify the parties who sign it. Public notaries are licensed state officials that are the only ones who can notarize a bill of sale.

A car, unlike a television, computer or other piece of personal property, must have a title. A title is an official record that indicates who owns a car and whether there are any liens or encumbrances on the vehicle. When you buy a car, you must be able to obtain title through the vehicle. In most car sales, you obtain title from the seller when the seller writes your name on the back of the title as buyer.

The Tax Benefits of Leasing Vs. Owning a Vehicle

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Tax rates differ by state and areas within the state, but you can likely save on taxes if you lease a vehicle. Depending on your area's tax rate, however, this savings may not prove substantial. Before pursuing a purchase or lease, consider new car tax variables, which can help save you money in the long term.

Most states require buyers to pay taxes on a vehicle's lease payment, not the selling price of the car. However, a lease payment also includes an interest rate, so expect to pay taxes on the interest charge, as well. You can keep your taxes out of the lease payment by paying it upfront. Despite paying taxes on the lease payment and interest charge, expect to pay less toward taxes over the lease term than you would with a comparable finance.

If you finance your vehicle or purchase it with cash, you must pay tax on the purchase price of the vehicle. Very few states offer a tax-free vehicle purchase. If your tax rate is over 8 percent, expect to pay thousands of dollars toward tax. Dealers are authorized to collect tax on the state's behalf, but if you purchase a vehicle privately, tax is often due once you transfer ownership. Call your state's motor vehicle office to determine your tax rate and budget for it accordingly.

At the end of your lease you can purchase the vehicle for its predetermined market value, which was figured during lease inception. The lease purchase price does not include taxes. In the event that you purchase a lease, it is likely that you'll pay more toward tax than you would have if financing. Shoppers often focus on monthly payment when shopping for a lease and do not negotiate the vehicle's price. As a result, you may spend thousands more for your vehicle. Expect to pay taxes on your purchase price.

If you have a vehicle to trade in, it can help you save on tax expenses. Most states recognize that you've already paid taxes on the vehicle you intend to trade. For this reason, many states allow you to deduct the trade value from the new vehicle's purchase price before applying tax. If you have a trade worth $10,000, you would save $800 in tax charges if your area charges an 8 percent sales tax. It is not advisable to trade a vehicle for a lease. If you total the leased vehicle, expect to lose any money you used as a down payment. Insurance payoffs go to the leasing bank, not the lessee.

Early Termination of a Leased Vehicle

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When a person cannot afford to make the lease payments on a vehicle, one option is to simply return the vehicle. However, this is a bad idea for many reasons. The good news is that a number of options may allow a person with a leased vehicle to get out of the lease. Consumers should understand these options and choose the best one for their needs.

When you return a leased vehicle early, you must contact the lender and notify it of the situation. The lender will then arrange a time and place to take possession of the vehicle. However, you must pay penalties for early termination of the lease. These fees will vary depending on the specific lease terms, but will often be thousands of dollars. The lease documentation will note the fees for early termination. In addition to these penalties, lenders treat an early termination as a voluntary repossession, which will damage your credit score.

One option for a person with a leased vehicle who needs to get rid of the vehicle is to sell it. Before considering this,you must determine whether the lease allows the buyer to purchase the car. If so, obtain the price of the vehicle from the lender. You'll then have to arrange for the sale of the car and come up with the cash to pay the difference between the sales price and the price the lender is charging for the car.

Perhaps the best way to get rid of a leased vehicle is to find someone else to assume the lease. Again, you must determine whether the lender allows another person to assume the lease and the cost of the transaction. Numerous online businesses that help consumers find someone to assume a lease. These businesses provide both a listing service for the vehicle and assistance completing the lease assumption transaction. There are fees to transfer the lease and to use an online service, but this can be the most inexpensive way to get rid of a leased vehicle.

Many leases allow you to trade in a leased vehicle for another vehicle.This generally does not allow you to get out of paying for the old lease; the dealer simply rolls the cost of the remaining lease into the new lease. However, by moving from an expensive vehicle to an economical one, a person may end up with a lower lease payment even with the addition of the remaining cost of the old lease added.

Relief From High Interest Car Title Loans

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High interest car title loans are the new scourge in lending. What many state attorneys general have deemed veiled loan sharking, these loans often trap vulnerable borrowers into high-interest, high-fee loans that customers have little hope of repaying. Similar to payday lenders, these operations feed on a struggling consumer base. To relieve yourself of a high-interest title loan, you must execute several strategies.

If you have disposable income left over at the end of the month, you're already well on your way to gaining relief from a car title loan. The first step is to set up a strict budget and exercise financial discipline. To begin, spend as you normally would for two weeks, but write down every single expense. Then, at the end of those two weeks, review your purchases and begin trimming your miscellaneous budget---coffee and other small daily purchases---and your entertainment budget. Set up a fund that will be used exclusively to pay down the principal of the loan. This will only work if you religiously stick to your budget.

If you feel you've been misled or lied to about your loan, contact your state attorney general. Since the process may take a long time, you may need to contact a lawyer to handle a lawsuit. If you cannot afford an attorney, you can attempt to secure representation from your local American Civil Liberties Union office or a consumer advocacy law firm.

Keeping a loan up to date and in repayment is in the best interest of both the lender and the borrower. Contact your title loan lender and attempt to secure a "hardship" plan. A restructuring is normally temporary and will not give you full relief from payments, but it may help you catch up and pay down more of the loan in the hardship period.

Seek refinancing options. Check your credit report (see Resources for a free copy) to make sure your scores will qualify you for a lower rate loan. Normally, any score above 660 will give you better options. Speak with your local bank or credit union about personal loans. You'll most likely be unable to secure another car loan, but a lower-interest personal loan from a reputable bank or finance company will decrease your payments.

Be careful when seeking refinancing options. Sometimes desperate borrowers go from one bad situation to another. Speak with a trusted adviser---friend, family member, accountant, financial adviser---before signing new loan paperwork.

How to Take Over Individual Car Payments

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If you find yourself in need of a new car, you may know someone who is looking to get rid of a car that he is making payments on. If you are interested in his car, you can take over their individual car payments instead of going through a car dealer. However, taking over someone's individual car payments can be very risky and should be entered into with caution, as the vehicle typically remains titled in the original owner's name.

Instructions

Ask the current owner of the car to contact the lender of the car loan. Have them inquire of the lender if they will rewrite the loan and allow someone else to take over the individual car payments. Some lenders will do this, providing that you can pass a credit check, and some lenders will not.

Type up a contract to to take over the car payments if the lender will not do a rewrite. This is the only way that you can protect your interests if you are taking over car payments without the assistance of the lender. The contract should include the seller's name and contact information, your name and contact information, the car information including VIN number, the amount of the monthly payment, how and where it is to be paid, how the title is delivered once the car is paid off, who is responsible for insurance and titling of the car, who is responsible for repairs of the car and what happens if you default on payments.

Take the contract to a notary with the person who is selling the car. Each of you should sign the contract in the presence of the notary. The notary will serve as witness that each of you signed the contract and will check your photo ID to make sure you are in fact the person named on the contract. Then the notary will sign and stamp, or put a seal, on the document.

What to Bring to the Bank for an Auto Loan

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Banks require many forms of documentation before approving an automobile loan. Gathering the needed documents before searching for a new vehicle will help get your loan application and approval completed quickly. Banks ask for documentation that will help them determine your ability to qualify for a vehicle loan. Banks also require documentation to comply with laws set forth by the Department of Homeland Security.

Lenders typically request one to three months' worth of paycheck stubs. If you do not have the required amount of paycheck stubs, the bank may request alternate proof of income. A statement from your employer will normally suffice for proof of income in lieu of paycheck stubs. If you are self-employed, most banks will require copies of your tax return for the past two years. Bring proof of other types of income such as alimony, rental income or legal settlement if you want them included as part of your regular income.

The bank will require proof of identity before considering closing your loan. A copy of your driver's license and Social Security card will provide enough proof of identity. If you do not have your Social Security card, you can request a new copy of it from the Social Security Administration. The proof of Social Security number the SSA provides will suffice to complete your loan. You can also use your U.S. passport for proof of your identity.

You will need a valid driver's license, insurance for the vehicle you are purchasing and proof that you live at the address on your application. A current lease, mortgage receipt or utility bill will prove your residency. You must provide proof of vehicle insurance before you drive the vehicle off the car lot. Many insurance agents will fax a copy of your new insurance policy. You must first provide the vehicle information needed to add the vehicle to your policy.

If you do not have a credit history that is verifiable through one of the three main credit bureaus, you must provide proof that you are worthy of credit. Letters of credit from your landlord and utility providers will help prove your credit worthiness with a bank. Your past banking history can also help the bank make a determination on your credit. Ask any locally owned company you have had a positive credit relationship with to provide written verification of your credit worthiness, if they do not report to the credit bureaus.

New Car Financing

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You have numerous financing options for your new car purchase. Manufacturers offer incentives for buyers to purchase a new vehicle, whether in the form of rebates or low interest rate offers. Leasing is also a possibility. However, your credit standing may affect your financing and interest rate options.

Special rates and rebate offers are advertised online at the manufacturer's website. Usually, low interest rates are offered in lieu of rebates. To obtain the special rate, you must use the manufacturer's bank for financing. Rebates may be offered without regard to how you pay for the car but may require you to use the manufacturer's bank. If so, you might obtain a higher-than-average interest rate. To determine which offer saves you more money, use an auto loan calculator to review total loan payback cost.

Leasing offers a lower-priced option to financing. Instead of owning the vehicle as you would if pursuing a traditional finance, you can drive a new vehicle for a specified term and mileage and return it to the leasing bank at the end of the contract term, usually around three years. Leasing requires you only to pay for depreciation, not the entire vehicle cost. Mileage restrictions apply; you can often choose from 10,000 to 18,000 miles per year. Leasing offers are also advertised on manufacturer websites.

You can pursue a car loan at any loan provider you'd like. If you were declined for a loan through a manufacturer's bank for leasing or low-rate financing, you can reapply using a co-signer. Subprime lenders also exist locally or online. Subprime lenders offer loans to risky borrowers with poor credit. Many new-car dealers also use subprime lenders to obtain loans, so work with a dealer if you have credit issues. If the manufacturer doesn't require you to use its lender for rebates, you can still use your discounts when applying to an outside lender.

Taxes and fees increase the cost of your new-car purchase. Depending on the area in which you live, you can pay thousands of dollars in tax fees. Adding an extra $1,000 to your loan amount increases your monthly payment by about $20 per month without a down payment. Find out your taxes and state fees to budget appropriately. Once you purchase your vehicle, the dealer will offer an extended warranty and other aftermarket items, which also increases your car payment. Be sure to stick your budget throughout the sales and loan process.

Does It Affect a Car Loan If the Co-Applicant Has Bad Credit?

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When you apply for a car loan with a co-applicant, the lender checks both your credit score and the credit score of the applicant. A co-applicant with a high credit score strengthens the application and usually means you pay a lower rate. If your co-applicant has a poor credit score, it weakens your application and means you pay a higher interest rate.

Lenders use credit scores as a way to gauge your character before you take out a loan. If your credit score shows that you have failed to pay off previous loans or that you make infrequent loan payments, the lender assumes that those bad credit management habits are likely to continue. Lenders are not obliged to lend you money so if you or the co-applicant have a poor credit score, the lender may decline the loan application.

You may have a low credit score because you make frequent late payments, but you or your co-applicant may also have a low score because you have very little credit history. When you have no credit history, lenders are wary to lend you money to buy a car because the lender has no way of knowing if you are the kind of person who makes every effort to pay your bills on time. However, if you add a co-signer to your application and that person has good credit, you can usually qualify for the loan. In the absence of much credit data relating to you, the lender relies heavily on data related to the co-signer---therefore a co-signer with good credit helps you obtain a loan.

Lenders generate profits from charging interest on car loans. Lenders charge the lowest rates to people who seem unlikely to default on loans. If you or the co-applicant have a poor credit score, the lender may still approve your application but only if you agree to pay an above-average interest rate. If you pay more interest than other borrowers, then it means the lender loses less if you eventually default on the loan than the lender would lose if you paid the same interest rate as more creditworthy borrowers.

Aside from your credit score, the lender also has to ensure that you have enough income to make the loan payments. If you have good credit and sufficient income to finance a car without a co-signer, then you can only harm your application if you add a co-signer with a credit score lower than your own.

Lease vs. Paying in Cash

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Benefits and disadvantages apply to cash purchases and vehicle lease options. During a lease, the bank is the vehicle's owner, requires specific insurance coverage and limits your vehicle's mileage allowance and wear and tear. Paying cash, on the other hand, allows you to insure, drive and sell your vehicle as you please.

If you pay cash for a car, you can reduce or change your insurance coverage without penalty. If you lease a car, you must purchase full-coverage insurance. Leasing banks also limit deductible options, usually to around $500. Most insurance companies, however, offer deductible options up to $1,000 or more. Lease contracts also require gap insurance, which covers the bank's loss if your vehicle becomes a total loss. Gap insurance prices range from $95 to more than $600 at the time of publication. Gap insurance is paid at the start of your lease term as a one-time fee.

Leasing banks assume the car's future market value risk, calculated as the lease residual value, while you assume risk for the future value of the car if you pay cash. At the beginning of your lease, the bank calculates the car's future value based on a percentage of the car's manufacturer's suggested retail price. The residual value is your purchase price for a lease-end buyout and the amount the bank prices the vehicle at for resale. If the bank guessed the residual value wrong, it assumes the loss. If you pay cash and the car's value significantly drops because of market conditions, you'll lose money if you resell or trade the vehicle toward another purchase in the future.

If you can put the cash you'd pay for your car into an interest-bearing savings account during the term of the lease, you might lose potential profit by paying cash. Because you'll only pay for about half of the car's price during the lease term, your money might earn more interest while you make monthly payments. Check current savings rates and compare the amount of interest you'd earn to the interest you'd pay during your lease term. Ask a dealer for the lease's interest rate, known as the money factor.

If you purchase the vehicle at the end of the lease term, you'll likely spend thousands more than a cash purchase unless you negotiate the price of the vehicle before leasing. Leasing customers often focus on monthly payments rather than vehicle cost. Rebates and discounts don't usually apply to leases, meaning the lease is based on MSRP. If you think you might purchase the car at the end of the lease term, compare current purchase discounts to total lease cost and buyout amount to decide which option offers the most savings. If you exceed your wear-and-tear or mileage allowance during the term of the lease, you'll also pay penalty fees when you return the leased car.

Car Buying and Credit

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Car financing is a type of installment loan, meaning that you borrow a set amount and pay it back in equal payments spread out over a specific time period. You can get credit on your own or with the dealership's help. You must choose your financing carefully to get the best deal rather than relying on the dealer, according to Edmunds editor Warren Clarke.

Dealers have finance departments to help you find car loans, but Consumer Reports recommends looking for credit on your own before car shopping. Banks, credit unions and online lenders all offer competitive car loan rates and will give you pre-approval if your credit rating is good enough to qualify.

Never include financing in your negotiations when buying a car, Consumer Reports warns. Salespeople often present car prices in terms of monthly payments, disguising the true cost. Explain that you are only interested in the out-the-door price and will deal with the loan separately. Leave the dealership and go to another one if the salesperson resists.

Car manufacturers sometimes offer special financing. Interest can be as low as 1 percent or even 0 percent if you have an excellent credit rating. These specials usually require you to forfeit any rebate. Compare the cost of keeping your pre-appproved loan and taking the rebate with skipping the cash back and getting the promotional loan rate instead. Auto research websites, such as Edmunds, have online calculators to help you compare your options.

Prepare yourself for car buying by checking your Experian, Equifax and TransUnion credit reports before seeking loan pre-approval. The Fair Credit Reporting Act entitles you to a free report from each bureau annually. The Federal Trade Commission advises that these no-cost reports are only available through AnnualCreditReport.com. You can buy reports or get free ones by buying services or memberships directly through the credit bureau websites. Your vehicle financing power is reduced if the reports are riddled with negative items. Dispute any errors you notice with the forms provided on the bureaus' websites. The FTC explains that the bureaus are legally obligated to investigate and make corrections within 30 days of notification. Your ability to get a loan is improved if negative entries are fixed or erased.

You will end up paying a high interest rate for your car loan if your credit rating is bad. Edmunds editor Clarke recommends refinancing the loan within two or three years if you improve your credit rating in the meantime. You can probably find a bank, credit union or finance company that will refinance you at a better rate if you build up a timely payment history on your existing loan and other bills.

Auto Financing Guide

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You can save thousands over the term of your car loan by choosing a lender with a low interest rate. Banks use a variety of information to decide your rate. You can determine your rate by applying for a preapproval before choosing a car. Consider the various auto loan providers from which you can choose and which information is used to determine your loan status.

Auto financing companies use your credit report to determine whether to extend a loan and how much of the vehicle's value to offer. Lenders also adjust your monthly term, down payment requirement and interest rate according to your credit standing. Before you apply for an auto loan, check your credit to make sure your accounts are correctly reported to the credit bureaus. Annual Credit Report offers consumers one free credit report per year from Experian, TransUnion and Equifax. Review your credit and correct any inaccuracies before you apply for a loan.

Auto loan providers base your lending percentage on the car's value and your credit. With excellent credit, you may borrow up to 120 percent of the vehicle's bank-determined value; with poor credit, this amount could drop to as low as 60 percent. You may need to provide a down payment for this reason. Your maximum monthly loan payment may also be limited based on your debt-to-income ratio. Your lender decides how much of a car payment you can afford by reviewing your monthly debts (listed on your credit report) and your gross annual income, which you'll prove by providing a recent pay stub. The lender may restrict the total amount of your loan to suit your debt-to-income ratio, so you may have to shop for a lower-priced car or provide a down payment.

Compare rates before applying for your car loan. Manufacturers may offer low rates for new cars, although you'll have to apply to the manufacturer's lender. Credit unions offer low rates for new and used cars. Check websites to view rates of banks in your area or research online lenders, such as Capital One, Road Loans or Americredit. Car dealerships also provide car loans to buyers; many use a mixture of local and nationally-based lenders. Call different lenders to determine interest rates if you don't see the information online.

Once you determine which lender to use for your auto loan, obtain a preapproval. A preapproval can take up to a week's time, so applying for one before you shop can quicken the buying process once you find the car you want. Additionally, you can use your preapproved interest rate to determine your price range, allowing you to shop within your means. Once preapproved, your lending representative can go over your term options and down payment requirements, if any exist. If you plan to purchase from a dealer, bring your preapproval with you and allow the dealer to beat your rate, if possible.

How to Back Out of Buying a Car With a Dealership

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You may have difficulty backing out of a car purchase if you've signed the paperwork and have taken possession of the vehicle. If you signed a loan agreement and motor vehicle paperwork, you may not have any recourse. If you left a deposit on a vehicle and don't want to follow through with the car deal, you can probably receive your deposit back. A dealership cannot force you to purchase a vehicle unless all paperwork has been completed and processed.

Instructions

Do not sign a purchase agreement, or buyer's order, unless it states that your deposit is refundable and based on your ultimate purchase decision. Doing this can avoid arguments or other difficulties and ensures your dealer knows that you have not made a definite decision as to whether or not you will purchase the car. If you do sign the buyer's order, do not take the car if you are unsure about purchasing it.

Call the dealership and ask to talk to your salesperson. If the salesperson is not available, talk to the dealer's sales manager. Tell the dealer representative that you changed your mind about the vehicle and do not intend to purchase it. Ask to have your deposit refunded.

Return the vehicle immediately if you left a deposit and took the car. You may have a problem getting your full deposit back if you took the vehicle home. If this is the case, the dealer may justify keeping some or all of your deposit because of damage, cleaning fees or the mileage you put on the car.

Call your state's motor vehicle department if the dealer refuses to give you back your deposit. A deposit does not conclude that you purchased the vehicle. Ask your motor vehicle department how you can process a complaint about the dealer for taking your money; in many cases, the dealer will be investigated or at least receive a phone call.

Call the state motor vehicle office to find out if there is any recourse after signing paperwork and taking possession of the vehicle. Many states do not recognize buyer's remorse issues or a "cooling period." If your state does offer a return policy, follow any steps it requires to return the vehicle.

Call your dealership and ask to speak to the sales manager to discuss returning the vehicle. If you already signed the paperwork, you have little time to return the car. If you signed the motor vehicle paperwork and bank contracts, you must return the vehicle before your paperwork is processed, which usually is within one to two business days.

Return your vehicle within one day of purchase, even if the sales manager tells you otherwise. The sales manager may tell you that returning the car is not an option, but many dealers will take a car back to avoid the difficulties of pursuing the car deal or risking a negative reputation.

Return the vehicle with all items it came with, such as keys and owner's manual. If the dealership is closed upon your return, park the car in a safe place and lock the doors.

Drop the vehicle keys off in the dealer's overnight drop box with a note stating your name and why you are returning the car. Drop boxes are by the dealership's service department. If there is no return box, return the keys the next morning.

Deciding Factors in Purchasing a Car

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Purchasing a car is something that nearly everyone has to go through at some point, and the decision can have a large effect in your life. Looking at the proper factors when making the decision can play a big role in whether you choose the right car for your situation.

One of the factors that you should consider when purchasing a car is the gas mileage. The fuel economy of the car can play a big role in how much it costs you to drive the car overall. While the initial purchase price is important, the ongoing costs are often just as important. High fuel costs over the life of the car can cancel out savings on the initial price.

Another factor to consider is the functionality of the car. Looking at your individual situation can provide clues as to what type of car you need. For example, if you have a family of four, a small two-door sports car may not be the best buy. Consider the size of the car and whether it has four-wheel drive if you will be driving in conditions that would warrant it.

Financing of the car should also play a role in your decision. For example, you could choose between buying the car with a loan or leasing it. If you are buying the car, the interest rate should be considered. You may also get factory rebates or other incentives to buy. When leasing, you may not be required to make a down payment, but some people make one to reduce their monthly payments. If this is the case, determine if the amount of money that you have to put down is worth the savings on the monthly payment.

When you buy a new car, look for a warranty, which will ensure that any problems with the car will be addressed at no expense to you. When you buy a used car, this may not be an option, depending on how old the car is. Each warranty will provide different benefits and last for a certain number of miles or years.

The reputation of the company that is selling the car should also play a role in your decision. Research online with sources like JD Power, which rate cars on a number of factors. By reading these resources, you can see what other people think about a brand or model before buying one.

Can I Finance a Truck With an RV?

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Recreational vehicles (RVs) offer comfort for travelers and come in different types: a bus-style motor home, a camper van, a travel trailer towed by a truck. Most consumers finance a part of the cost as RV prices can be as high as several hundred thousand dollars.You have several financing options for a truck and an RV depending on your situation.

You may be able to finance an RV with the truck if you already have a truck loan and have paid it down significantly. If the difference between the value of your truck and the balance of your truck loan is what you need for your RV, a lender may refinance it. You will use the proceeds from refinancing to pay for your RV. The collateral for the loan will be your truck. The RV title will be clear, without a lien holder. You may do so, as long as the lender can refinance your truck and give you enough cash from the proceeds.

If you are purchasing and financing both a truck and an RV, each vehicle (collateral) must have a separate loan. RVs are luxury vehicles and loan qualification guidelines are stricter than for auto loans. To qualify and to get a low interest rate, you need to have a good credit history and a high credit score. RV interest rates vary; check with various financial institutions to find the best option. When you inquire, lenders will give you a range of rates as they need to analyze your application and credit report to determine the exact rate. A lender may offer you a lower rate if you finance an auto and an RV loan at the same financial institution.

If you decide to purchase a camper-style RV, you will need a heavy-duty truck to tow it. Many RV dealers sell trucks equipped to tow RV campers. Before you go shopping, you will need to get a loan pre-approval. Submit an application and ask for a pre-qualification letter from a lender. A dealer will be more willing to negotiate if he knows that you have already arranged the financing. Buying an RV and a truck at the same dealership may give you an advantage to bargain for a lower price. Research and shop around for the best price.

If you need to finance a small amount, consider getting a truck title loan. If you own a truck free and clear, you may use the title loan proceeds to pay for an RV. A truck loan is likely to have a lower interest rate than an RV loan. Keep in mind that you may only do so if your truck's value is as much as you need to purchase an RV, and if a lender is willing to loan up to that amount.

Can You Be Sued for Car Payments After a Repossession?

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A lawsuit to recoup car payments following a repossession is possible, but a few factors affect whether an auto lender would go to that extent to collect the payments. For example, the amount owed on a repossessed vehicle may impact a lenders decision to pursue a lawsuit to collect the remaining balance on a vehicle.

Repossessions generally take place when car buyers don't pay their auto loans as agreed. A lender who repossesses a vehicle usually sells it in an attempt to get money to pay as much of the remaining balance on the loan as possible. However, you could be held responsible for any portion of the balance that's left unpaid after the sale of your repossessed vehicle. The lender has the right to bill you for the remaining balance, and there are a few options for collecting the debt if you don't pay it.

An auto lender may use a collection agency's services to recover the balance owed on a repossessed vehicle. However, the Nolo law information website indicates that the lender may decide to sue you to collect the balance. A lender could ask for a court order to garnish your wages if the lender wins the debt-collection case against you. Your employer would be required to deduct a specified amount of money from your pay and send it to the lender to pay off the auto loan if a garnishment takes place.

Some people who can't make their car payments return their vehicles to the dealership where they bought them in what's known as a voluntary repossession. Such actions prevent lenders from having to hire a company to seize a vehicle, but the Experian credit-reporting company indicates a voluntary repossession is just like a regular repossession. That means the lender can still require you to pay the balance on your auto loan, and you still may be at risk of facing a lawsuit to collect the debt.

Lenders use auto repossessions as a last resort to collect delinquent debts because they lose several thousand dollars on repossessions, according to Bankrate.com writer Russ Heaps. Therefore, consider renegotiating your loan terms if you're having trouble making your car payments; a lender may be willing to work with you to avoid a repossession. Heaps notes that extending the time you have to pay off a loan by just six months can significantly reduce your monthly payment, making your vehicle more affordable. You would pay more in interest charges by extending the loan, but you also could avoid a repossession and a lawsuit.

How Can I Negotiate to Pay Off My Car Loan?

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Many borrowers mistakenly think they can pay off a loan early; after all, the lender would be getting paid sooner. However, when a loan is paid off early, much of the interest the lender would have charged is no longer applicable. The lender stands to lose money if you pay off your loan ahead of time. If you want to pay off your loan before it is due, you may have to negotiate a deal with the lender.

When you get a loan quote, the lender uses the terms you request to determine your interest rate. For example, if you request a five-year loan, the lender will adjust an interest rate over that period of time. The longer your loan, the higher the interest rate. The lender is factoring in inflation, the cost to tie up capital and other considerations. When you suddenly change one of the terms by paying off the loan early, the lender may actually be left with a lower profit.

Most lenders will charge a premium if you want to repay your loan early. This premium may be lower than the cost of paying off the loan over time, but it will be higher than the flat payment for the remaining principal on the loan. In some cases, you may find repayment is extraordinarily high; this may occur if you have a balloon loan. With this loan, your initial payments only went toward interest until all of the interest for the entire loan cycle was repaid. Only at this point did your payments apply to principal. This means, even if you repay your loan early, you are responsible for the entire cost of interest over the life of the original loan. In some states, balloon loans are considered predatory and are therefore illegal.

To negotiate to payoff your car loan, start by requesting a quote from your lender. This quote will reflect your principal debt remaining plus a payoff fee. This fee should be lower than the total cost of interest you would owe if you paid off the loan on schedule. If it is, consider accepting the quote and paying off the loan. If the cost is actually higher, meaning you are being penalized for paying off your loan early, you will want to negotiate for a lower quote.

Unfortunately, you have little bargaining power when it come to negotiating a loan payoff. You signed a legal contract when you took your loan, and your lender is under no obligation to modify this contract. Consider offering the lender a payment lower than the payoff quote but higher than the remaining principal balance. This would be the quintessential "win-win." You would save money by paying off the loan early, and the lender would still make a profit. If you are offering this option, consider explaining why. For example, if you are leaving the country or going back to school, the lender may be enticed to accept your offer now before your ability to pay changes.

The Steps of Financing a Car

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Financing a car is one way to purchase a new automobile. Some people pay cash for cars and avoid a dealer's finance department. But if you don't have this type of cash on hand, consider financing the purchase. There are steps to financing a car that can ensure the best interest rate and auto loan terms.

Work on increasing your credit score before beginning the car buying process. Auto loan lenders work with people of all credit groups. But if you are interested in a low-rate auto loan and the best auto terms, improving a low credit score can help. A credit score of 700 or higher can qualify you for favorable auto loan terms. Ways to improve a score include paying your bills on time and, if you have consumer debt like credit cards, start paying it off.

The majority of auto loan lenders will need to see proof of income or employment before approving your auto loan application. If you can't afford the monthly payment on an auto loan, finance companies will repossess the automobile but could still lose money on the deal. Bring a copy of your most recent income statements or tax return when visiting auto dealerships. If self-employed, provide tax returns for the past two years.

Financing a car and getting the best rate and terms will involve shopping around and contacting different auto loan lenders. You might look into dealership finance options. But rather than accept the first auto loan that you're offered, be patient and consider other options. Visit your bank or credit union and get an auto loan quote. Compare quotes and take note of the interest rate, the loan term and the monthly payment. Pick the auto loan with the most affordable interest rate.

Financing a car doesn't always necessitate making a down payment or having a co-signer. However, a down payment helps secure a lower interest rate on the auto loan, and if you have no credit history or a poor credit history, a co-signer can help you get approved for the loan. Co-signers need an established credit history and a good credit score to compensate for your low score. If supplying a down payment, aim for at least 10 percent of the sale price.

Can Someone Take Over Someone Elses Car Lease?

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You can have someone take over your lease payments, just as long as your lender allows lease transfers. Lease transfers are not a quick process, as the person taking over your lease must apply to your bank for lease approval and sign contracts. Learn about how to transfer a lease to someone else and which factors you should consider before doing so.

Transferring your lease is known as lease assumption, and not all banks allow it. Call your bank to ask if transferring your lease is an option and how to go about having an interested lessee apply. A lease assumption allows someone else to take over the remainder of your lease, while still having to abide by mileage requirements and end-of-lease fees stated in your contract. Lease transfers are attractive to some since the original lessee has already put money down and finished out some of the leasing term.

The person you transfer your lease to must have good to excellent credit. Not only will you have to advertise to find an interested party, but you'll also have to find someone with established credit, as well. The new lessee must also provide full coverage insurance on the leased vehicle before the transfer becomes official. Some lenders charge over $500 for a lease transfer, which either you or the applicant must pay. Ask your lender if any transfer fees apply; this way you can decide if you'll cover the charges or if the applicant will.

Unless you have someone ready to take over your lease, you'll have to advertise. Go to LeaseTrader.com or SwapaLease.com if you want to target those interested in assuming a lease. The websites do charge for their services, but can take care of bank requirements, including applications, pre-screening and contracts. Otherwise, you can try your area's used car classifieds, whether it be newspaper or Internet advertisements. Also let friends and family know you want to transfer your lease, as word of mouth can find you an interested party.

Some lenders require you to stay on the lease contract even after transfer, meaning you become responsible for missed payments or end-of-lease charges, such as over-mileage, excess wear-and-tear or unfixed repairs if the person you transferred to does not pay. Transferring to a stranger can prove risky if your bank doesn't allow for a full transfer. Ask your bank if you have to remain on the contract with the new lessee, and if so, consider the financial risks involved before transferring.

The Process to Sell Your Own Vehicle With a Lien

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If you want to sell your vehicle with a lien on it, you must work with your buyer and your lender to do so. Working with both allows you to receive the lien release necessary to transfer ownership in most states while you keep the buyer apprised of the time frame of the transfer.

You must pay off your loan to obtain a lien release, and in some states, the lender holds the title until the loan is paid. Your title lists your lender as the lien holder, which is shown on the front of the title. Before selling your car, call your bank to discuss your payoff amount, which is the amount you'll usually have to pay before you can transfer ownership. The lien release is an official bank document that states the release of interest in the vehicle. You can sell your car for more and keep the profit, but if your payoff is less than you can sell your car for, you'll have to come up with the difference. Most states do not allow you to transfer vehicle ownership while a lien is present.

After you find out your payoff amount, ask about the time frame to obtain a lien release from your bank after payment is made. This way, you can better inform your buyer of the process and time frame to completely transfer ownership. Find out the quickest way to obtain the release and if you can arrange for the buyer to make payment if the bank is not local. If your state holds titles (some give the title to the lien holder instead of the borrower), find out how long you can expect to wait before getting it. This information should be relayed to the buyer once you have it.

Deal with buyers just as you would if you had no lien on your vehicle. Once you have an interested buyer, let her know that you have a loan on your vehicle that you intend to pay off with the sale amount. This is not entirely uncommon, but the buyer should know he cannot purchase the vehicle that day and title it the next. Depending on the cost of your vehicle, you may find that the buyer has to complete loan paperwork to purchase your vehicle, which will take some time itself. If your buyer finances through your lender, the bank can take care of the payoff and titling with the buyer.

Pay the loan off physically at the bank, if possible. If the lender is local, you and your buyer should arrive to the bank together to pay off the loan. Doing so ensures buyer's peace of mind, as he'll know that the sale money is going towards the pay off and he can obtain the lien release and title that day, in most cases. If your lender is not local, arrange for payment to be made to the bank by the buyer, not by you. Ask your lender how to arrange for payment to be made by another party. If you owe money on top of the sale price, pay it before the buyer makes his payment and allow your bank to confirm that the loan has been satisfied (the bank can put a note in the system to discuss information with a named party).

In some states, you can transfer ownership of a vehicle while a lien holder is listed on the title. However, most knowledgeable buyers prefer to have a lien release before titling, as the vehicle can be repossessed for your non-payment. In such states, you can sign the title over to the buyer so the vehicle can be titled and registered quickly. You can mail the lien release to the buyer as soon as you receive it. Call your state motor vehicle office to ask if you can transfer ownership with a lien holder listed on the title so you are prepared to give your buyer the option.

How to Sell a Car to a Private Party Through an Installment Plan

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Whether they want to replace an automobile with a newer model or they are trying to ease the financial burden of monthly payments, most adults need to sell a car from time to time. You can opt to sell your car through a dealership or privately. Selling your car privately takes longer, but in most cases you will receive more money for your vehicle. Some buyers present a check for the full amount, while others might ask to set up a monthly payment arrangement. Before accepting a payment plan, familiarize yourself with the process.

Instructions

Find the car's market value. Research Kelley Blue Book or another online automobile appraisal resource to learn the market value of your automobile. These websites usually include information on trade-in values and private party values.

Advertise the vehicle. Run an ad in your local newspaper and include information on your automobile to attract buyers. The vehicle's mileage, condition, make and price should all be included. You should also place a For Sale sign in the back window of the car and include your contact number.

Clean the car. Wash the car's exterior and have the interior detailed to improve the vehicle's appearance.

Draft a contract. Once you find a buyer, write a contract detailing the sale price for the automobile and specific information regarding the amount and length of the monthly payments. Include a clause that states your right to repossess the vehicle if the buyer defaults on the agreement. Make a copy of the agreement and present it to the buyer.

Complete a bill of sale. After receiving all installment payments for the vehicle, complete the bill of sale located on the back of the vehicle's title. Fill in the blanks and write "sold as-is" on the document. Make a copy for yourself and present the buyer with the original. Ownership transfers once the buyer presents the title/bill of sale to your state's Department of Motor Vehicles.

Cancel insurance and registration. Call your insurance company to have the vehicle taken off your insurance, and contact your DMV to find out how you should cancel the registration.

Can You Hide Your Car If it Is Going to Be Repossessed?

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The phrase "you can run but you can't hide," meaning that you can try to escape from your problems but eventually they'll catch up with you, applies to hiding a car about to be repossessed. Eventually, the repo man is going to find your car. Repo men use every trick in the book, including staking out your house, following you and grabbing the car when you park.

If you stop making your car payments or are consistently late, finance companies, banks or credit unions are going to send someone out to find and take back the car. If your car is repossessed, you have 15 days to catch up with your payments or pay the loan in full, plus any repossession fees, and redeem the car. Some lenders give you 25 days, according to Edmunds.com. If you can't come up with the money, the lender sells your car at auction. The lender deducts the amount the car sells for to determine what you owe. Chances are you still owe the bank, even after the car sells at auction, because you also pay for repossession fees, auction fees and interest.

Many people try to hide their cars to keep them from being repossessed. Repo men, also called recovery agents, perform a job called "skip tracing," which is looking for the car using online databases. The agent gets all of your information from your credit application, so he knows where to find your car. The car is only at the car owner's residence about half the time, according to Edmunds.com. If you move the car, besides searching online, the repo agent calls or visits all the places you could be. Some recovery agents install infrared cameras that read license plates on parked cars. The cameras can read 300 plates an hour, according to Car and Driver. The recovery agents cruise around the areas your car could be. When the camera reads an "assigned" license plate, the computer sounds an alarm, and a few minutes later, your car is gone.

If the recovery agent has to conduct an active search for your car, you pay for the cost. The more difficult you make it for the agent, the more it's going to cost you in the end. Repo men bill for the time they have to spend looking for your car, and that cost is added to what you owe on the car. If you are behind in your payments, the best thing you can do is to notify your lender. You might be able to work out a modified payment plan. If not, your car is a voluntary repossession, which saves you the repossession fees. Your credit report will probably read that you had a voluntary repossession, which might look slightly better to future lenders than having a repossession listed on your report.

If there is any chance that you won't be able to afford your car, do not waste your money on fancy rims or speakers. Once you add those to the car and the car is repossessed, the lender keeps all your additions. If you did buy accessories, take them off and replace them with the original equipment. All you are entitled to get back is your personal property, including baby car seats. But sometimes your personal property can "vanish," according to Edmunds.com.

Money Saving Tips for Buying a Car

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Buying a car begins with a major decision. Think about whether you want to finance part of the cost of the new or used vehicle or to pay the total price in cash. The kinds of incentives a dealer offers could be tied to specific types of financing. For example, a dealer might offer 0 percent interest financing for 5 years if you use its own finance company, such as Nissan Motor Acceptance Corporation or Ford Motor Credit. When you've got excellent credit, may persuade you to save some cash and finance at least part of the purchase.

You don't want to negotiate a certain amount off the dealer's published full price. You want to negotiate up from the dealer's actual cost. Some dealers advertise in print or broadcast markets that they will show you their invoice. Other dealers might be willing to share it if you ask. You want to go up from this baseline to ensure you're getting a good deal. Sometimes belonging to a bank or credit union automatically entitles you to a special offer (such as $500 over invoice). Ask your financial institution before shopping for a car with which dealers they have special financing agreements.

Consider buying a used car instead of a new car. A car with low mileage can give you almost the same amount of mileage and save lots on retail price markups. Road and Travel Magazine's Kyle Busch notes, "A 2- to 4-year-old used vehicle can be purchased at a savings of 25 to 50 percent as compared to its cost when new." As a final option, you can trade an old vehicle in against a used car purchase to slice another thousand or two off the total sales price.

Before sitting down and reading paperwork for a specific vehicle, compare the types of cars in the showroom and in the dealer parking lot. On the vehicle summary posted on the windshield or window, find any obvious upgrades the dealer added after the factory, such as custom tinting, leather interiors or pin-striping. If you don't need these upgrades, you can save a lot of money. Ask your salesperson to sell you a model without these upgrades even if it must be ordered in the color you want from the factory. Pay the base price plus any features you must have.

When shopping for a car, read all parts of the sale contract before you sign. That is something to ask to look at even before a salesperson tries to get you to sign other forms. Look for hidden fees, such as a dealer's administrative costs. If the dealer really wants to make a sale, like if you're smart and you shop at the end of the month, the salesperson can get permission from a sales manager to remove fees that aren't required by state or federal laws.

Do I Get Any Cash Back if I Refinance My Car?

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When you refinance your car loan you do not receive any cash back if you take out a straight refinance loan. Lenders do allow car owners to take cash-out refinance loans, however, and then you would receive money back. You can either use a cash-out refinance loan to pay off an old loan or use it to extract cash from a car you own free and clear.

Secured loans, such as automobile loans, work on the basis that if you default on loan payments, the lender assumes control of the collateral used to secure the loan. For a lender to fully secure a loan, the amount you borrow cannot exceed the value of the collateral. Some lenders write purchase car loans equal to 125 percent of a car's value, but cash-out refinance loans are typically capped at between 80 and 100 percent of a car's value.

When you refinance a car loan, your new lender contacts your old lender and requests a pay-off quote. You can take the difference between the car's value and the pay-off amount as cash back. Most lenders have processing fees for car loans, however, and in many states you also have to pay document tax whenever you take out a loan. You can choose to roll these costs into the loan or pay the costs as an out-of-pocket expense. Ultimately, you are left with the same amount of cash.

Cars and other vehicles lose value due to having limited lifespans. Generally, lenders only finance cars that are less than 7 years old. Additionally, term times offered on cars are progressively shorter for old vehicles. The term time impacts your payment because shorter term times mean larger monthly payments. When you take out a car loan, the bank examines the total amount of your monthly debt payments relative to your total monthly income. Generally, your debt-to-income ratio cannot exceed 50 percent. Therefore, people who take out loans on older cars often have problems qualifying for large amounts because short term times mean payments would exceed DTI maximums.

When you take out a cash-out refinance loan on a car, you risk losing that car if you ever fall behind on your loan payments. The money you can borrow on cash-out car loans are similar to the sums available on unsecured products, such as credit cards. If you have a credit card and cannot make your payments, you do not have to worry about losing your car. Therefore many people prefer not to tie loans to their cars. Secured loans such as cars, however, have fixed low rates, whereas credit cards have variable rates that are often very high.

How to Reduce Car Payments

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The benefits are many when you reduce your car payments. Financial problems can strain relationships, affect your level of concentration at work, and even lead to health problems. Your quality of life also diminishes if you live in a constant state of panic and worry about losing your vehicle. Fortunately, manageable car payments can reduce the stress level in your life and improve your financial situation. What's even better, you don't need professional help to lower your auto payments. You can do it yourself.

Instructions

Refinance your car. A lower annual percentage rate (APR) can significantly reduce your monthly car payments. This is particularly true if you currently have a high APR and your credit has improved since your car purchase. Look for a car loan with an APR of at least 1 percent lower than your current loan.

Trade your car for a less expensive one--either an older vehicle or a less expensive model. For example, an automobile that costs one-fourth less will reduce your car payments by one-fourth. If your current monthly payments are $400, you will pay $300.

Sell your current automobile. Pay off the loan, and lease another vehicle. One benefit of car leasing is that you can often find a newer, more expensive auto and still have lower monthly payments.

Renegotiate the term of your auto's purchase agreement. Although not advantageous, this option will reduce your monthly car payments. Once your financial situation improves, you can make higher payments to pay off the loan.

Eliminate your car payments. Sell your car and buy an old beater for about $1,000 or less. You can upgrade once your situation improves. You may have to put up with negative comments from family members, friends or co-workers. However, your stress level will diminish, and you'll be able to focus on the more important things in your life.

How to Sell a Car in VA

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In Virginia, selling a car is a fairly painless three-step process --- sign, transfer and inform. The buyer of the car is the party who has the most work to do in getting it registered in his name. The Virginia Department of Motor Vehicles (DMV) office has a clear selling procedure for citizens to follow to ensure a smooth transaction.

Instructions

Sign the back of your car title. Under Section A, enter your personal signature as well as the name and contact information of the buyer, who will become the new registrant. Enter the agreed upon selling price and odometer reading.

Ask the buyer to sign and confirm his information in the required area of the title in Section A. Hand it over to him along with the car after payment has been made.

Remove your license plates from the car before the buyer drives away. Mail back or drop off your plates to the nearest Virginia DMV location unless you plan to use the plates for another car to be registered in your name.

Call the Virginia DMV office to inform them that you've sold your car. Provide the car VIN, title number and date that you transferred the car to the other party. You can also send notification online. Call your insurance company to cancel your policy for the car, since it is no longer in your possession.

How to Sell a Vehicle With No Copy of the Title

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All states require you to have the title of the vehicle you own; this may pose a problem if you want to sell your car but don't have the title. You can simply request a duplicate title if you lost the original title, but you and the buyer will need to follow a few more steps to legally complete the sale if you do not own the title. Your financial institution owns the title to your car until you pay off the loan, so you must pay off the loan at some point so you can transfer the title to the buyer.

Instructions

Visit the Department of Motor Vehicles' "Replacing a Lost Title" website (see Resources).

Click on your state.

Follow the instructions listed for your state, as all states have different steps you must take to replace a lost title. For example, Minnesota requires you to fill out a duplicate title form and pay fees, whereas Delaware requires you to fill out a duplicate title form, include your license number, a fee, the current odometer reading on your car, tag number and expiration date. Most states allow you to mail in the form or fill it out at a local DMV office. You will typically receive your duplicate title in the mail within 15 days.

Schedule a date to sell the car with the buyer, and tell him you would like to meet at your bank and will pay off the loan once you receive the money so that you can sign the title over to him.

Call your bank. Tell them you would like to pay the remaining balance of your car loan so the lien will be released. Inform them of the date and time.

Meet the buyer at the bank. Hand the teller the required amount of money to pay off the loan. The teller will give you the title. Sign the title over to the seller to officially complete the transaction.

How to Sell a Vehicle That Is Not Paid Off in California?

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California laws allow for a change of ownership for a vehicle even if it has not been paid off. The process for title transfer is straightforward, but to sell a vehicle that is not paid off in California the current owner must obtain an authorized signature from the vehicle's lien holder. The lien holder is the entity that legally owns the vehicle, according to the Department of Motor Vehicles' records. This ownership is reflected on the vehicle's Certificate of Title or "pink slip."

Instructions

Obtain or provide a smog certificate that is less than 90 days old. Hybrids, electric, diesel and natural gas vehicles over 14,000 pounds are exempt from this requirement. Motorcycles, trailers, vessels and automobiles made before 1975 also are exempt.

Enter the odometer reading in the designated area on the California Certificate of Title. Vehicles older than 10 years are exempt from this step.

Sign and date the title in the appropriate section.

Obtain the lien holder's authorized signature in the appropriate section. Have the signature notarized to avoid future conflicts.

Ask the buyer to fill out and sign the transfer information on the back of the title.

Visit the DMV's online Notice of Transfer and Release of Liability system and follow the onscreen instructions (see Resources). This step must be completed within five days of the sale of the vehicle.

Is it Difficult to Change a Loan Over to a Different Car?

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If you want to cancel one vehicle loan and finance another, expect to pay off your current loan first and then apply for financing for the other car you want. You can't actually transfer a car loan to another vehicle, because the vehicle is not the same. You can, however, trade your vehicle toward another purchase, or sell the car on your own to satisfy your current auto loan.

Auto loan providers base a loan amount on a vehicle's market value. For this reason, you can't transfer a loan to another car; the new vehicle you want to finance is assessed differently. Lenders base your loan amount on the vehicle's market value, which depends on its year, make, model, mileage and features. So, you aren't likely to obtain a $20,000 loan on a vehicle worth only $10,000. Even if you purchase the exact same vehicle, you aren't guaranteed that both vehicles are worth the same amount. Your vehicle may be depreciating faster than you're paying toward your loan, or other market conditions may create a difference between your car's original and current lending value.

Having an approval for one car loan does not guarantee another car loan approval. Any time you alter a loan or initiate a new finance contract, the lender reviews your credit information and credit application to determine whether to extend a loan. Based on your payment history, current accounts and credit balances, your lender will adjust your interest rate based on your lending risk. You may still obtain another loan, but perhaps with a different interest rate if your credit has changed.

If you plan to purchase a car from a dealership, you can trade your vehicle in toward your new car purchase. To take your car for a trade-in, your dealer must pay off your old car loan. Many dealerships also handle financing for customers, so you can use your dealer to find a new auto loan provider, as well. The trade process is very similar to selling your car, except your dealer handles most of the paperwork. Once the trade-in process is complete, you'll pay only your new auto loan provider.

You can also sell your old car before you purchase a new one. Make sure you have been pre-approved for a loan before selling your old car. To sell your car while it still has a loan, you'll have to find a buyer and satisfy your loan to officially transfer ownership to the new owner. Talk to your bank to find out how much you must pay to satisfy your loan amount. If you can sell your car for more than the loan payoff amount, you may keep the profit. Otherwise, you'll have to come up with the remaining balance due for your loan.

How Can I Tell How Much My Car Is Worth?

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Several websites offer appraisal guides to help you determine your vehicle's value, whether you plan to sell it privately or trade it in toward another vehicle purchase. Other factors may affect your vehicle's value, such as market conditions, buyer interest, availability or necessary repair costs. Use any resources available to you to ultimately determine your vehicle's value.

Edmunds.com and the Kelley Blue Book website provide appraisal guides for trade-in and private sale values. The NADA Guides website, which also provides values for dealerships, offers an appraisal guide for trade-in values. The websites are guides only and do not necessarily offer a definite price for your car. Use the values from all three sites to determine a fair value for your vehicle; each website offers a different price. The websites also allow you to choose the condition of your vehicle, so choose the one that most accurately reflects your car's condition for more accurate pricing.

Although the appraisal websites take your location into consideration, you can further determine the value of your car by searching the local classifieds to see how other sellers have priced their vehicles. Use your local paper, or websites, such as AutoTrader.com, the AllofCraigs website or the eBay Motors website. Be careful not to use dealer sales prices, as retail prices are higher than private sale values. Ensure that the vehicles you research have the same engine, transmission and features as your car.

If you were able to find results for similar vehicles in your area, you may have noticed that actual sales prices were higher or lower than results from appraisal guides. If gas prices become a concern for consumers, you may not sell your car for its suggested value because of lack of consumer interest. Or, if you have a rear-wheel drive sports car, you may benefit from waiting until the spring or summer to sell it, rather than the beginning of fall if you live in an area with snow.

If you plan to trade your vehicle toward another purchase, your vehicle's actual value relies on the dealer's appraisal price. The dealer's offer should be close to the values you obtained on your own. If the dealer's offer is lower, find out why. If your dealer finds that your car needs new tires, repairs or body work, it must decrease the costs from its appraisal value. If your car is in good condition and is likely to sell quickly, the dealer may offer you a higher value.

Lien Holder Rights in Repossession of a Vehicle

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A lien on a car is a common occurrence. Typically, when a person finances a car purchase, the financing company has a lien on the car. The company reserves the right to repossess the car in the event of nonpayment by the purchaser. However, repossession rights are strictly regulated.

The right of repossession belongs to the person or company that holds the title to the vehicle. The lien must still be valid. If the lien has been paid off but the title has not yet been transferred, the lien holder cannot repossess the car. The person repossessing the car must have the original documents detailing the lien and the powers that the lien grants to the repossessing party. If the repossessing agent does not have those documents, the company can still repossess the car if it has a valid court order authorizing it to do so.

The lien owner must have attempted to collect the monies owed to them. In the absence of payment, the lien owner must notify the possessor of the vehicle of his intent to repossess. Afterward, the lien owner may repossess the car. The company can perform the repossession at any time and is authorized to come onto the property of the possessor of the car to do so. However, the company and its agents are not allowed to enter an enclosed structure, such as a garage, for the purposes of repossession.

After the vehicle has been repossessed, the lien holder must notify the possessor of the repossession and let the person know how he can reclaim the vehicle. If the possessor does not pay the amount owed, the lien holder is authorized to remove any personal possessions and sell the vehicle. Additionally, if the possessor wishes to reclaim the vehicle, he will have to pay the full amount owed. This portion includes late fees, the amount owed and the cost the lien holder incurred while repossessing the vehicle.

The lien holder must sell the car. This process can be either achieved through a private sale or a public auction. The lien holder may not sell or keep any personal belongings that were in the car at the time of the repossession. This stipulation does not include any improvements that the possessor made to the vehicle, such as an upgraded radio. If the amount the lien holder makes from the sale does not cover the amount owed, the lien holder may pursue the possessor for the difference. However, if the lien holder makes more than the amount owed, he is entitled to keep the difference.

A Car Is in Repo & the Company Won't Settle

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A bank or other lender that won't settle after repossessing your car may simply be positioning itself for a better offer from you. The bank may simply feel you have not made a reasonable offer to settle a so-called "deficiency balance." The deficiency balance is the amount remaining on your auto loan after the repossession. The amount is determined after the bank sells your car at an auction or through a private sale. Example: The balance on your auto loan was $10,000 when the car was repossessed, but it sold for only $6,500 at auction. That leaves $3,500 plus repossession fees remaining, and the bank wants that money from you.

The bank can file a lawsuit against you for the deficiency balance, and that can result in a civil judgment ordering you to pay the full amount. If you fail to pay, the bank can return to court to request a written court order allowing the bank to garnish your bank account or wages for the amount that you owe. The threat of a judgment or garnishment means you should seek the advice of a credible consumer affairs attorney. The attorney can advise you about your legal rights and help you prepare to defend yourself against a lawsuit, if necessary. Ask for free help from your local chapter of Legal Aid if you cannot afford an attorney on your own.

The lawyer can determine if the bank followed the law as it sold your vehicle and determined the deficiency balance. The Federal Trade Commission reports that the lender must sell a repossessed vehicle in a "commercially reasonable manner." That means the lender cannot sell the car for a price that is far below fair market value and then expect you to pay an unreasonable balance.

A letter from your attorney offering to reach a fair settlement will indicate to your bank that you are serious about resolving the issue. The attorney can challenge the lender on the selling price of the car, and argue that the price was not fair. It doesn't matter if the price was fair or wasn't. The tactic can be used as a negotiating ploy by the lawyer as he tries to negotiate a fair settlement.

The attorney should provide you with written documentation of the settlement that is signed by an officer of the bank. The settlement should detail the entire agreement, including how much you are required to pay and when. The settlement should also indicate that you will not be sued as long as you pay the amount agreed.

Car Repossession Rights in Indiana

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A vehicle loan is a secured loan where the vehicle serves as collateral. Therefore, if the vehicle owner defaults on the loan, the lender can repossess the vehicle and then sell it to at least partially make up for its losses. In Indiana, both the lender and the borrower have certain rights when it comes to repossession.

In Indiana, banks extending vehicle loans can repossess their collateral after one missed payment if their contracts contain acceleration provisions. An acceleration provision allows the trustee or bank to demand immediate payment of the remaining loan balance after just one late or missed payment. After repossession, banks typically sell their repossessed cars and file lawsuits against borrowers who defaulted on their loans for any remaining loan balance after the sale.

In Indiana, consumers who paid less than $3,200 for their vehicles have legal protections against acceleration clauses. Creditors may not both sue borrowers and repossess their vehicles. Indiana requires banks to use only one of two available remedies: either file a lawsuit or repossess. Lenders who choose to repossess their ownership rights may not sue buyers for the remaining loan balance.

Before repossession agencies repossess cars, agents must provide local law enforcement with repossession disclosures. Repossession agencies must disclose their identities, their intent to repossess, the vehicle owner's name and address and the address where the repossession will occur. Repossession agencies must provide this information before the repossession or within two hours after the repossession.

Under Indiana law, banks can freely repossess their vehicles after providing notice, but they must also comply with the state's order and peace laws. Banks cannot repossess their vehicles by damaging property, using force or violence or disturbing the public. Banks that violate the peaceful entry requirement may be liable for resulting damage costs.

Since consumer protection laws can frequently change, you should not use this information as a substitute for legal advice. Seek advice through an attorney licensed to practice law in your jurisdiction.

Wednesday, October 31, 2012

Money

Registration

Bill of Sale

Title

Monday, October 29, 2012

Lease Taxes

Purchase Taxes

Lease Purchase

Considerations

Saturday, October 27, 2012

Early Termination

Selling the Car

Lease Assumption

Trading

Friday, October 26, 2012

Budget

Lawsuit

Managing a Loan

Refinance

Warning

Tuesday, October 23, 2012

Instructions

Income Documentation

Identification Documents

License, Insurance and Proof of Residency

Proof of Credit

Special Rates or Rebates

Leasing

Other Financing Options

Considerations

Monday, October 22, 2012

Character

No Credit

Rates

Income

Sunday, October 21, 2012

Insurance Requirements

Future Market Value

Savings

Considerations

Pre-approval

Negotiations

Special Financing

Considerations

Bad Credit

Your Credit History

Factors Affecting Loan Terms

Rate Comparisons

Preapprovals

Instructions

If You Left a Deposit

If You Signed Paperwork

Thursday, October 18, 2012

Gas Mileage

Functionality

Financing

Warranty

Reputation

RV Financing with Truck

RV Loan

Truck Loan

Truck Loan

Wednesday, October 17, 2012

Process

Debt Collection

Voluntary Repossession

Avoiding Repossession

Monday, October 15, 2012

Background

Regulation

Process

Bargaining

Sunday, October 14, 2012

Improve Credit

Provide Income Proof

Shop Around

Considerations

Saturday, October 13, 2012

Options