What Should I Consider About Buying My First Car?

Your first car is probably not going to be new, and it will probably come with a personality. However, that car will serve you well if you choose it wisely. Your budget will be first priority, especially settling on a realistic budget and sticking to it. After that, several factors should be considered.

Budget and Reliability

Your primary consideration, unless someone else is buying the car for you, is the cost of your vehicle. Your budget must include not just what you'll be giving the dealership, but also elements such as insurance, gas mileage, maintenance and reliability. Instead of buying the first cheap car you find, research the make, model and year. If you know any mechanics, ask their opinion of the car. Gauge how much you'd be paying in gas each month. Make certain the car has good maintenance records; if the owner can't supply them, ask for the VIN and run your own check on Carfax or Autocheck. Don't let the owner or salesperson rush you into a decision; if you miss out on a good car, another will be along soon. It's better to not buy a good car than to spend all your money on a bad car.

Style vs. Practicality and Insurance

While it's normal to desire a sporty car, be even more careful to gauge the real cost when considering one. Sporty little vehicles tend to be higher on insurance, and much higher if you're young. You should also consider what will work best for you and your situation. Two-door cars are nice, but if you're planning to have a baby before selling it, you'll be much better off with a four-door sedan or even a minivan. If you must have the sporty car, consider buying a more sedate vehicle and modifying it. You'll have a significantly cheaper insurance rate.

Safety

Your new car must keep you and your passengers safe. Later-model cars, starting around 2005, have side-impact air bags installed standard, but they are a bit more expensive. Very reliable vehicles are also safer, as they won't stop suddenly and leave you stranded in a bad neighborhood. Larger, heavier vehicles that are not top-heavy are safer, as their frames can take more punishment in an impact, but of course they are not sporty and often not fuel-efficient. You'll need to decide how much safety you are willing or able to give up for the sake of budget and looks.

Financing

First-time car buyers are usually teens and young adults with little or no credit history. As a result, you aren't likely to get a good interest rate, if you can even get approved for a loan. Minimize this problem by coming in with a sizable down payment in addition to the license, tax and registration fees you'll need to pay. If you belong to a credit union, you can get a pre-approved loan at an acceptable interest rate before going to the lot; this has the added advantage of enforcing your budget, and it frees you to look at private-seller cars as well. If all else fails, you may need a co-signer. If you're prepared for all these eventualities before car shopping, you'll be able to purchase your car quickly and with minimal pain.

Sales Technique and Bad Bargains

Car salesmen have studied their customers for years, and invariably know much more about how to convince you to buy the car than they know about the car itself. First-time car buyers are ideal marks, as they have no idea what tricks the sales team may use. For this reason, try to go to a car salesperson you know personally. If you don't know any, take an experienced car buyer with you to prevent you from doing anything foolish. Remember, once the contract is signed, you're obligated to live up to it. Make sure it's the right contract and the right car.

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Can I Take a Car I Co-Signed for Even if the Primary Owner Is Still Paying for It?

When you co-sign for a car loan, you put your own credit on the line by agreeing to guarantee the primary owner's payments. If the primary owner does not make the payments as promised, the lender will require the co-signer to pay off the balance of the car loan plus interest. While several pitfalls come with co-signing a car loan, one key disadvantage is that you have no rights of ownership concerning the car, only an obligation to pay if the primary owner doesn't.

Registration

The car would be registered in the name of the primary owner. The co-signer has no legal right to drive the car or take possession of the car for any reason. Even if the primary owner quit making payments on the car and the bank was threatening repossession, the co-signer is powerless to take the car. Although banks rely on co-signers to make car payments in a worst-case scenario, civil law does not give co-signers any right to take a car from the primary owner under any circumstances.

Credit

Co-signing for a car loan can affect your finances in other ways. The balance of the car loan will appear on the credit reports of both the primary owner and the co-signer. If the primary owner makes late payments on the loan, those late payments are reflected on the co-signer's credit report as well, causing the co-signer's credit score to suffer. Even if the primary borrower makes all payments on time, the co-signer's ability to obtain credit could still be affected. The loan balance for the car will appear on the co-signer's credit report and if the co-signer needs another loan, he may be turned down because he has already borrowed too much money. For this reason, co-signers who are approved for new credit often must pay a higher interest rate.

Parent-Child

There are good reasons why friends and family members agree to co-sign car loans, but co-signing for a person who cannot obtain bank approval based on his own credit history can end up being a big mistake. It could make sense, though, for a parent to co-sign a car loan for a teenage child who lives under the same roof and is covered by the family insurance policy. Parents could turn the car purchase into a learning experience by supervising the car payments and car maintenance. Parents and legal guardians who co-sign for a car under those circumstances are in a better position to take a car even if the primary owner is still paying for it.

Co-ownership

People who choose to help friends and family members purchase a car should consider co-owning rather than co-signing. Co-owners have equal legal rights to the car. While the person who is requesting the financial favor may object to the idea of sharing ownership of the car, that could be a sign he is insensitive to the vulnerable position he is willing to place the co-signer in.

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What Happens if a Car Gets Repossessed and Who Pays for It?

When a lender seizes your vehicle for nonpayment, you might be offered an opportunity to purchase it back. If you don't, the lender resells the car and bills you for the amount due on the loan. Even though you dont own the vehicle any longer, you must still pay any balance due on the loan, as you agreed to do when you signed your original contract.

Repossession Process

After you miss one or more payments, your lender may seize your vehicle by hiring a repossession company to collect the car. After the car is back in the lender's possession, it will send you a letter stating the amount you can pay to retrieve your car, which is usually the total amount past due or the entire cost of the car. You'll also receive notice of the date the lender intends to sell the vehicle. If you don't receive a letter from your lender, call to find out the balance due to retrieve the car and the date the lender plans to sell the car so you may plan accordingly.

Resale and Balance Difference

Borrowers facing repossession often find themselves in a negative equity situation, so selling the car privately for private-sale value isn't usually an option without an out-of-pocket payment. Many lenders resell repossessed vehicles at auction, which yields wholesale value, the lowest value for a car. After the sale, the lender will send you a letter asking for the amount due on your loan, which is the total of the loan payoff amount, repossession fees and reconditioning fees (charged for cleaning the car for resale) minus the vehicle's selling price.

Responsibility and Payment

The contract you signed at the beginning of your loan states that youll pay your loan balance even if you default on the loan. Read your contract if you're unsure of your responsibility. After the lender sells the vehicle, it reports the balance owed to the credit bureaus in addition to the repossession. The repossession notation remains for seven years from the month you originally defaulted on the loan. If you pay the balance due, the repossession remains on your credit, although your account will read "paid" to other lenders. As time goes by, the impact of the repossession on your credit rating and lending risk decreases.

Nonpayment

Your lender can sue you for nonpayment. If your lender sues you and wins its case, it can issue a judgment, which also appears on your credit and further damages your credit rating. After issuing a judgment, the lender may garnish your wages. Wage garnishment for loan nonpayment isn't allowed in several states, so check with a lawyer to find out whether the lender can take a portion of your wages. If you still don't pay your loan balance, the repossession remains on your credit as an unpaid and delinquent balance. Borrowing a loan while the repossession exists on your credit might prove difficult.

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How to Make a Payment to Honda Finance Online

Honda Finance is the program designed to help people buy and finance Honda vehicles. Managing your Honda Finance account is made easier through online accounts, where you can make payments online, view your transaction history and statements as well as update your account profile information from your own computer. Making a payment to Honda Finance online only requires the existence of a Honda Finance account.

Instructions

1

Go to "Honda Finance" (See References) and click on "Register for Owner Link" to register for an online account.

2

Input your basic information, such as your name, email address, desired user name and password, and your Honda finance account number, which you can find on your billing statement.

3

Activate your account by clicking on the confirmation link sent to your email address and logging into your new Honda Finance account using the username and password you created upon setup of your account.

4

Click on "Make Payment," and enter the amount you would like to pay; or select "Pay in Full" to pay the full balance of your statement.

5

Input your debit/credit card information to complete your payment.

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What If You Go Over Mileage in a Leased Car?

Car leases are written with a specific amount of miles that are to be driven each year. The lease contract limit is the total amount of miles per year, multiplied by the number of years in the lease. For example, on a 3-year lease at 12,000 miles per year, the mileage limit on the lease is 36,000 miles. If the car is driven more miles before the end of the lease, there will be an over mileage charge.

Excess Mileage Charge

An automobile lease contract will specify the amount of the charges if the car is driven more than the contract miles. The charge will be listed as an amount per mile. Typical excess mileage charges are 15 to 25 cents per mile. If the car is turned in to the leasing company at the end of the term, the lessee or car owner has to pay the amount of any excess miles multiplied by the mileage charge.

Serious Money

The excess mileage charge on a lease can add up to a significant amount of money if the lessee did not control the number of miles driven. If you turn in a car with 50,000 miles on it, but the car lease had a contract limit of 36,000 miles and a 20-cent-per-mile excess mileage charge, it will cost you an additional $2,800. It is possible for someone who leased a car, with a low mileage lease contract and high driven mileage, to pay $5,000 or more to turn in the leased car.

Controlling Excess Mileage Charges

A driver with a leased vehicle must be aware of the mileage limits. The first step is to select a lease with mileage that corresponds with the amount of miles you typically drive in a year. A low mileage lease should not be selected just to get a lower payment. If the driver knows she will drive more miles, it is possible to buy excess miles up front and have them included in the lease contract. Upfront miles cost less than the excess mileage charge and some leasing companies will return the money if the miles aren't used.

Minimizing the Damage

If a leased car has been driven high miles with a significant number of months left on the contract, consideration should be given to trading the car in early. For example, a lease car has reached the mileage limit with 6 months left to go on the lease. The car is being driven 2,500 miles per month; the monthly payment is $400; and the excess mileage charge is 20 cents. If the car is driven to the end of the term, the cost will be $2,400 in lease payments plus $3,000 in mileage charges. The car could be traded in now and the $2,400 in remaining payments due rolled into a new purchase or lease. Getting out of the lease early would save the $3,000 in excess mileage charges.

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Refinancing a Car & Gap Insurance

When a vehicle is totaled in an accident, a car insurance policy only covers its market value. If an owner has a loan on a totaled vehicle, he may end up owing money to the bank if the market value of the car is less than the loan balance. In this case, gap insurance can save him hundreds or thousands of dollars.

Gap Protection

Gap protection covers the difference between the loan balance and the insurance settlement when a vehicle is damaged in an accident and is beyond repair. Not every vehicle needs gap protection. Consumers often obtain financing without putting a large down payment on a vehicle. Vehicles depreciate by as much as 30 percent in the first two years. If a vehicle gets in an accident during that time, most likely its value will be considerably less than the loan balance. In this case, car owners may benefit from gap coverage.

Types of Gap Protection

A consumer may have a choice of gap or gap plus coverage. In the event of a total loss, gap covers the balance due on a loan or a lease after the insurance company makes a payment, less the insurance deductible. Gap plus protection offers the same as a regular gap but also cover the insurance deductible of up to $1,000. Restrictions may apply. A consumer should check the coverage information to ensure the plan covers all types of loss, including accidents, natural disasters and theft.

Refinancing a Loan

Gap coverage doesn't transfer from one loan to another and ends when a loan is paid off. When a consumer refinances, he obtains a new loan in place of an old one. When an old ends, so does gap coverage. When refinancing, he should purchase a new gap policy to replace the old one. He must pay a full charge for the new coverage. However, depending on the provider, he may receive a prorated refund for the old policy. He should check the contract for information on the refund policy.

Purchasing Gap Coverage

Lenders may offer to include the cost of gap protection in the loan when refinancing the vehicle. While this may seem like a good idea, a consumer should consider the long-term cost as he will pay interest on that amount. Lenders, car dealers, insurance agents and online vendors will offer gap policies at different prices. Cash or credit card payment is generally required at the time of purchase.

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How Can I Buy a Repossessed Car From the Bank?

Some people attempt to buy repossessed cars from banks because such vehicles often sell for less than the market value. Banks and credit unions do not like to keep repossessed vehicles on the books for very long because vehicles are depreciating assets. Additionally, financial institutions have to pay taxes and insurance for repossessed vehicles, so most banks and credit unions are eager to sell them quickly.

Instructions

1

Look in your local newspaper for the classified section. Financial institutions often place advertisements for repossessed cars in the auto classifieds section. Take down the details of any vehicles that interest you. Generally, newspaper advertisements for repossessed cars contain minimal information, but you should find at least the year, make and model listed to get you an idea of what's available.

2

Go online to the websites of banks and credit unions in your area. Perform searches for repossessed cars. Some banks do not list cars on the actual websites but provide contact information for people inquiring about inventory. Write down the details of cars listed or call the bank hotline and ask a representative about the repossessed vehicles they have on the books.

3

Contact local car dealerships. Many larger banks contract with car dealerships to sell repossessed cars on an individual basis or at auctions. Ask local car dealers about bank and credit union repossessions and take down the details of any cars that interest you.

4

Go to your local bank or credit union and apply for a vehicle loan. Provide the banker with your two most recent payslips or two years of tax returns if you are self-employed. Tell the banker about the vehicles that interest you. Most banks lend money on cars that are less than seven years old. Banks use the Kelley Blue Book to price vehicles. The banker pulls your credit score to pre-approve you and tell you how much you can borrow.

5

Contact the bank, credit union or dealer holding the repossessed vehicle that interests you. Ask to inspect the vehicle and request a carfax report. The report allows you to learn about the history of the car. If you like the condition of the car, make a bid. You should offer less than the Kelley Blue Book value and provide the seller with a copy of your car loan preapproval letter. Agree upon a price and ask the seller to give you a bill of sale. You take the bill of sale back to your lender and you receive a cashier's check payable to the seller. You exchange the check for the car keys and title.

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How to Determine How Much to Pay for a New Car

Whether you're concerned about your budget or just don't want to pay too much for a particular new car payment, several Internet tools can help you to make the most affordable decision. Before setting out to look at cars, you should consider your monthly budget and stick to it. You should also negotiate a vehicle's price accordingly. Learn how stick to your price range and to lower the price on the new car you choose.

Instructions

Budgeting

1

Go through your monthly bills. Take your monthly income after taxes and subtract your monthly bills to determine how much spending money you have left over.

2

Call your insurance company to find out how much you can expect to pay for a full coverage policy on a new car. Full coverage insurance is the most expensive you can buy and should be included in your monthly car payment budget.

3

Subtract your car insurance amount from the amount left over after bills. Decide on a comfortable payment that fits into your budget. Use an auto loan calculator to produce rough figures so that you can shop within your budget.

4

Go to the Edmunds website to access the "how much can I afford" calculator. Enter in your target monthly payment, money you plan to put down and loan term to see your price range. You can leave the default rate alone, if you like, as the rates are based on averages and are not the best you can get -- it is better to assume higher than lower.

Negotiating

5

Shop for cars within your price range. Go to different manufacturer websites to determine new car prices. While you're there, find the current month's incentives, which usually offer several thousand off the car as an incentive to buy, putting more cars in your price range.

6

Go to the Edmunds website again to use the True Market Value tool, which helps you to determine invoice pricing. Enter in all relevant vehicle information to determine the car's invoice price, which you will use for negotiations.

7

Add an amount over the invoice price, such as $700 to $1,000 for fair dealer profit. This is the amount you should pay for your new car before any manufacturer rebates or incentives. Subtract any rebates that you found on the maunfacturer's webpage for your total target price.

8

Go to a dealership and make your offer in person. If the dealer says no, keep shopping. Usually, a variety of same-make new car dealers exist in and around an area, so don't be afraid to contact them.

9

Save time by emailing dealers. You can find dealer contact and email information from the manufacturer's website. State your offer and interest in an immediate purchase if you numbers are met -- email more than one dealer, as one should meet your price because you did fairly figure your pricing in consideration of dealer profit.

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How to Buy a Used Car After Bankruptcy

Regardless of which type of bankruptcy you file, the effect on your credit report is damaging. Filing bankruptcy shows that you have problems repaying your debts, which can make lenders hesitant to loan you money after you have this show up on your credit report. If you need a vehicle after bankruptcy, it can be a challenge to buy a used car for yourself. However, it is not impossible to get a used car after bankruptcy. Other than potential financing difficulties, no other differences exist when buying a used car after a bankruptcy.

Instructions

1

Save money to use as a down payment or to cover the cost of the loan. The longer and more money you can save up, the easier it will be for you to buy the used car.

2

Wait as long as you can to purchase the car. Bankrate.com notes that the longer after a bankruptcy you can wait to apply for a car loan, the easier it is to get approved. This applies regardless of your down payment amount.

3

Establish a good credit record after your bankruptcy by getting a smaller loan or credit card, if you can, and making your payments on time. It can be difficult to get any type of credit after a bankruptcy, but some high interest rate credit cards are targeted at people with a recent bankruptcy. Even a secured credit card will have an positive effect on your credit history. You will likely receive solicitations by mail for credit cards but you can also use a site like Credit Card Guide to identify some after bankruptcy credit cards that you can apply for on your own.

4

Apply for a used car loan with your local bank or credit union, once you are ready to buy the used car. If you have a certificate of deposit with the financial institution, it may help you to get approved. Alternatively, you can shop for your used car at a local car dealer who specializes in helping people with bad credit get car loans. You should expect the interest rate on the car loan to be higher than if you did not have the bankruptcy on your credit report. Interest rates vary. If you have enough cash saved up for the used car, you do not have to apply for financing.

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What to Do If You Can No Longer Afford Your Car Payments

Many things can cause someone to become delinquent on their car payments, including the loss of a job or large, unexpected bills. There are a few things you can do if you find yourself no longer able to make your car payments.

Inform the Lender

When you first realize that you cannot make your scheduled car payment, call your lender and explain your financial situation. The repossession process can be long and difficult, so your lender might be willing to work with you in the hope that your financial situation will turn around.

Deferment

If you have a good payment history, ask your lender for a deferment. Some lenders are willing to defer one monthly payment for up to 30 days or two payments if they're added to the end of the loans term.

Refinance

If you still have decent credit, try to refinance your car loan. This won't necessarily reduce the amount of your debt, but it will restructure it so you can have lower monthly payments. You may even qualify for a lower interest rate. Check with your current lender about refinancing, but also consider going to other lenders to find the best deal.

Sell the Car

If you can no longer make the payments on the vehicle and there is no other financial solution, try to sell the car. However, because you cannot transfer the title to the vehicle until you pay it off, the buyer will need to pay the amount owed on the car or you must both go to the lending institution and combine your funds to pay off the car.

Assume Payments

Ask your lender if they will allow another person to assume your car payments. This is similar to selling the car, but the buyer simply starts making payments rather than paying the entire cost of the car upfront. The buyer will need to qualify through their income and credit history to be approved to assume the payments on your vehicle.

Repossession

If you can no longer afford your car payments and cannot sell your car or refinance your loan, the car may be repossessed. After a few months of missed payments, the lender will send a repossession company to take it back. The lender will sell the vehicle, and you will be responsible for any difference between the amount owed on the vehicle and the amount for which it sold. However, you should avoid allowing your car to be involuntarily repossessed, because it will cause serious damage to your credit.

Bankruptcy

In some cases, filing for bankruptcy may stop any repossession efforts. However, you should consult a qualified bankruptcy attorney before choosing this option.

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Leasing Explained

Got your eye on that new luxury car but not sure if you can afford it? Leasing may be your option. According to Smart Motors, leasing is often described as a poor man's way of driving a car he otherwise couldn't afford, as the monthly payments are lower and the commitment is shorter. However, good credit is required and a down payment may be as well; so, before you jump into a lease agreement, think about what you need in a car.

Instructions

Leasing vs. Owning

1

Get a copy of your credit report from each of the three credit reporting agencies: Equifax, Experian and TransUnion. Leasing a vehicle depends upon your credit score just as buying does. The better your score, the better the deal you'll be offered, according to Smart Motors.

2

Check your bank account. Even with excellent credit, you may have to put money down at signing. In fact, according to Lincoln's website, leasing a 2011 Lincoln Navigator requires $5,850 down when you put your signature on the lease agreement, which, in this case, lasts three years. The money down does include the first month's lease payment, says the Lincoln website.

3

Think about the monthly payments. Leasing a 2011 Lincoln Navigator would cost you $645 a month for three years after the down payment is made; owning the vehicle would cost $1,463 a month over the same time period, according to the Lincoln website. Decide which is affordable to you.

4

Consider what you want from the vehicle. When you own the vehicle, you can put as many miles on it as you want and make any modifications you desire. However, if you lease the vehicle, not only must you have the vehicle repaired by the shop, but you have a strict mileage limit to adhere to, you can't alter the vehicle and you'll be responsible for any dings or marks on the car, according to Smart Motors.

5

Think about the commitment. Leasing a vehicle binds you to a legal contract, which obligates you to making payments for the specified length of time. Breaking the lease comes with a heavy financial penalty, according to Smart Motors, which can exceed $1,000.

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How to Qualfiy to Lease a Car

Leasing can be a smart option for individuals who don't want to get locked into purchasing a new vehicle. However, it's not for everyone. There are three factors that come into play when qualifying to lease a car: your credit score, your available funds, and your debt-to-income ratio. Understanding how these factors work together will help you to qualify to lease a car.

Instructions

1

Research the vehicle. If you want to qualify to lease a car, you first need to research the type of car you are considering for lease. You will need information on the invoice pricing in order to negotiate the best lease. Additionally, if the payments are too high when compared with your current income and financial obligations, it's unlikely that you'll qualify for the lease.

2

Check your credit. You'll need to have above-average credit to qualify for a lease. Checking your credit before you attempt to lease a car will give you the chance to clean up any potential problems.

3

Call several dealers who sell the car you want. If possible, get not only their current prices but also their baseline credit requirements to be sure that you qualify. Don't limit yourself to two or three dealers. If possible, broaden your search to neighboring towns as well.

4

Clean up your credit, if necessary. If you find that you don't meet the minimum credit requirements, there are a few things you can do. Get current on any past-due balances listed on your credit report. Keep the balances on your credit cards low, and give your credit a few months to bounce back.

5

Save up. If you haven't already, consider saving for a down payment on the lease. Having a down payment for the lease can get you better payment terms as well as lower pricing across the board.

6

Visit the dealer who offers the best price. Try to visit during a day and time when sales are low, usually the middle of the day on a weekday. It can also help to visit at the end of the month, when dealers are under pressure to meet quotas for sales.

7

Negotiate from the invoice price up. Invoice pricing generally provides a slim profit margin for the dealer, and you can increase the offers from there. If you try to negotiate from the sticker price down, you'll usually end up paying too much.

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How to Buy Used Tow Trucks

If you are interested in starting a repossession or towing business, you do not have to buy or lease brand-new tow trucks. Instead, you can look for used tow trucks for the business. If you just need a tow truck for personal use, you can buy a used one on your own. Tow trucks are available in different sizes and engine types, typically referred to as light duty, medium duty and heavy duty.

Instructions

1

Make a list to determine what you need to use the tow trucks for and what type of truck you need. Tow trucks have different engine types and are different sizes. For instance, you may need the trucks for a business or you may just need them to move things around on your farm. Once you know why you need the trucks and what you will do with them, it can help you determine the best used tow trucks for you.

2

Assess your financial situation to determine how you will be paying for your tow truck purchase. Check your balance in your checking account, savings account and credit cards. If you don't have enough cash for the purchase, you may need to apply for a loan at your local bank. To do that, just fill out an application with your income and employment details.

3

Browse listings for used tow trucks on sites such as eBay Motors, Lynch Truck Center, Oodle Vehicles and Fleet Sales West (see Resources). Stick to listings for trucks that meet your needs. By looking at different sites you can get an idea of the fair market value of the used trucks so that you do not pay too much.

4

Pay for your used tow truck once you come to an agreement on the price. Sign the bill of sale with the seller, which is your purchasing contract. The seller must sign the title of the tow truck over to you to complete the purchase and transfer the ownership of the vehicle.

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Information on Refinancing a Car

Just as consumers can save money by refinancing a home mortgage loan, refinancing an auto loan can also result in significant savings. The process of auto refinancing works much the same way as for a home loan, in that a new lender pays off the balance of your current loan and offers you a new loan with a lower interest rate. However, the auto refinancing process is typically less cumbersome than that for a home.

Function

With refinancing a car loan, the borrower can take advantage of lower interest rates than those that were available when he purchased the car. Borrowers can complete the process online by visiting websites such as Up2Drive.com and CapitalOne AutoFinance. Bankrate.com allows borrowers to match your loan applications with other banks so that you can get the best rate possible.

Benefits

Edmunds.com indicates that refinancing could save you a considerable sum of money over the life of a loan. In some cases, you could reduce your monthly payment by $100 or more. Assuming your car loan is for a five-year period, the total savings could reach $6,000.

Types

There are a variety of borrower types who should consider refinancing. Those who have seen their credit score improve since they took out their original loan can benefit from lower interest rates. Those who may not have taken the time to get the best possible deal when they purchased their car may be able to get a better deal by refinancing. People who want to spread lower payments over a longer period of time to make room in the budget for additional obligations like a home mortgage can also be good candidates for refinancing.

Considerations

According to Edmunds.com, the process of refinancing a home is much easier than other forms of refinancing, such as that of a home mortgage. The application process typically only takes 5 to 10 minutes when using the Internet. The process also involves much less red tape and paperwork than a mortgage loan.

Warning

According to CarBuyingTips.com, most lenders will not refinance their own auto loans, so you will likely have to use a different financial institution to arrange your loan. Also, be sure to obtain your credit score before even considering applying for a car loan. If your score is below 600, you will have a very difficult time finding a lender.

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How to Sell My Mustang Online

Selling your Mustang online opens your sale to a wide range of potential customers who may not have seen your car listed otherwise. Consider the cost of shipping and placing sale listings before you decide that you're going to sell your vehicle online. Be sure that you're only using reputable shipping services that offer some type of insurance on your vehicle, in the event that it is damaged in transit. Once you've made the sale, you'll have to ship your Mustang or arrange for pickup.

Instructions

1

Find out the current value of your car by consulting the Kelley Blue Book, which is available online and at many local libraries and bookstores. Find the year of your Mustang and determine the condition to know how much it is worth. Potential customers will likely also look at the Kelley Blue Book, so set a fair price.

2

Take multiple pictures of the interior, exterior and engine of the Mustang. Photograph the vehicle identification number on the inside of the driver's-side door. Show the dashboard, seats, floorboards, trunk and any scratches or dings. It's important to be thorough when taking pictures, since prospective buyers won't be able to examine the car themselves before committing to the sale.

3

Scan any documentation you have on the car into a PDF file. Include mechanics' bills, inspections and any warranty information. You can send this via email to interested clients.

4

Create a listing on an online automobile selling site like eBay, Cars Direct or Auto Trader (see Resource section). Upload the photographs you took with the listing and explain that you can send additional documentation of repairs to interested parties.

5

Determine what methods of payment and shipping you will offer. You can accept check, credit card or even cash if the pickup is local. You don't have to agree to ship the car. You can request that only buyers willing to pick it up make a bid on your Mustang.

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How Much Do Class B Motorhomes Cost?

The price of a Class B motor home can vary from tens of thousands of dollars to more than a hundred thousand dollars, depending on its manufacture, features and specialized components. Typically, a Class B motor home looks like a van or a camper van from the outside. It is built on either a minivan or a full-size van chassis that has been adapted to accommodate a recreational vehicle, also known as an RV.

Definition

A Class B motor home is factory built to be an RV. In the RV industry, dealers are likely to refer to refer to customized vans for RV use as camper vans or van conversions, and to refer to units manufactured as RVs as Class Bs. Consumers may not make such distinctions, using the terms "camper van" and "Class B motor home" interchangeably. As of 2011, Family Motor Coach Association reports that the price of a Class B motor home starts at approximately $42,000.

Typical Features

Like other RVs, Class B motor homes may have either a gas engine or a diesel engine, with diesel usually the more costly engine type. Unlike a regular van, the front seats may be designed to swivel so they can become living area seating. Some Class B motor homes include a roof that pops up so that during use for camping people can stand without stooping over inside. Since the entire motor home occupies the space of a van, space-saving features are a hallmark. The living accommodations inside a Class B motor home may include a small propane stove top with a burner or two, a dorm size refrigerator, a sink and limited counter space. The bathroom accommodations commonly include a space-saving, condensed "wet bath," a stall where shower and toilet fit into one enclosed, watertight space. Sitting and dining areas usually convert to a bed or two for sleeping. Fresh water storage is typically limited to about 20 gallons, with waste water storage far less. As of 2011, Costhelper.com, in its Class B Motorhome Camper Van Cost list, indicates, "Prices start at $40,000 -$80,000 for a new Class B motorhome/van conversion, depending on size (15'-26' long), type of roof extension and other amenities."

Expanded Features

Models have emerged that have luxury features and heavy-duty construction. Some have upgraded cooking facilities. Some include slide-out panels to expand the living area during camping. Some units have seating to accommodate eight people, and others will sleep four. Flat screen televisions with built-in entertainment centers turn the camper van into a luxury accommodation. For the 2011 model year, Airstream RV Source.com lists several luxury models of the Airstream Interstate, a 22-foot-long Class B motor home with a turbo diesel engine on a Mercedes-Benz chassis, at a price of more than $125,000.

Advantages

Class B motor homes, given their compact size, are usually easier to park and easier to maneuver than larger RVs. Some can fit in a standard garage. The vehicle can in many cases be serviced by a mechanic who is not an RV specialist. Depending on make, engine size and type, model, vehicle weight and type of driving, the units can get fuel mileage comparable to an ordinary family van.

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Does Refinancing a Car Save Money?

You may not be happy with the amount of your monthly car payment or how long you have until the loan is paid in full. One option worth considering is to refinance your remaining balance into another car loan. Depending on the situation, pursuing this strategy may or may not end up saving you money in the long run.

Reducing Payments

Perhaps you are having difficulty making your monthly car payment and are considering refinancing to lower the payment amount. Unless you refinance to a much lower interest rate, you are simply extending the term of the loan in exchange for the smaller payments. As a result, you might actually end up paying more in interest over the long haul, even though you are reducing the amount you pay each month, and you'll be in debt longer.

Insurance Expense

Whenever you finance a vehicle, your lender will require you to carry comprehensive and collision insurance coverage with specific deductible amounts until the loan is repaid in full. If you extend your payment term by refinancing, you also extend the period you need to maintain comprehensive and collision on the vehicle, even though the vehicle's continuously diminishing value makes carrying these coverages less cost effective as the years go by. In many cases, comprehensive and collision make up 50 percent of a total car insurance premium.

Cashing Out

If you owe less on the car than it is worth, refinancing can provide a quick source of additional cash. For instance, if you owe $5,000 on a vehicle with a book value of $7,000, you can refinance the vehicle for $7,000 at a lower interest rate and receive $2,000 in cash when you pay off your old loan. You can make the transaction more lucrative by placing the cash in an investment instrument of your choice.

Lower Interest Rate

Refinancing your auto loan saves you money when you receive a lower interest rate without extending your payment terms or increasing your existing balance. Maybe you originally purchased the vehicle at a time when interest rates were high or credit problems forced you to accept a loan with a high rate. If after a year or two interest rates have fallen or you took steps to improve your credit score, refinancing to a lower rate can be to your benefit.

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How to Lower Your Car Loan Interest Rate

If your credit is bad you may have been forced to settle for a car loan with a high rate of interest. There are ways to get that rate lowered provided you qualify for a lower rate of interest. A lower interest rate means more of your payments go toward the principal balance, helping you pay off your car loan faster. You also pay less in finance charges during the term of your loan.

Instructions

1

Check with several lenders to see which has the most favorable terms. To get a lower interest rate, you will need to refinance your existing balance. Investigate whether you will be charged an application fee or any other fees. Determine how long the process will take and if the lender requires a down payment. Make sure your existing loan is paid on time; late payments could disqualify you.

2

Once you have found a potential lender, submit a credit application. The information will include name, address, date of birth, place of employment, Social Security number and personal references. Any missing information will delay processing time. The lender will examine your credit report.

3

Understand the new terms. A longer term can potentially decrease your monthly payment; a shorter term can increase it. If your application is approved, sign all loan papers and get copies of the loan agreement. The lender will send you a payment coupon book in the mail.

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Car Repossession Procedures

Lenders Attempt to Collect

In the first stages of a vehicle repossession, lenders tend to reach out to the borrower to work out some form of payment arrangement. The repossession procedure costs a considerable amount of time and money for lenders, so many banks are eager to avoid the process by establishing catch-up plans and extensions with their debtors. According to NoLo.com, a legal advice website, lenders may allow borrowers to miss one or two payments without formal repossession actions. The legal adviser goes on to reiterate that lenders can work out a number of arrangements for borrowers to avoid the expensive repossession process.

Lenders Contract out the Repossession

Few lenders actually carry out car repossessions on their own. Instead, most lenders contract out the work to trained repossession specialists. These specialists know local ordinances regarding repossession of vehicles and work closely with sheriff's and police departments to ensure a smooth, hassle-free procedure. When a lender contacts the repossession agent, the financial institution provides a copy of all necessary paperwork, a key to the vehicle and, when possible, information on where the vehicle might be located. The repossession agent then notifies local law enforcement that he is about to make a repossession, he then locates the vehicle and either tows or drives it away.

Repossession Agents Remove Personal Artifacts

Once a car has been repossessed, the repossession agent notifies the lender who, in turn, notifies the borrower. In most states, repossession agents remove all personal, nonattached items from the repossessed vehicle, such as sunglasses, CDs or clothes. Installed accessories such as CD players, subwoofers and alarm systems are considered part of the vehicle and left in place. If the borrower contacts the repossession agent, he may be able to retrieve his belongings; otherwise, the repossession agent retains the belongings for a period of time specified by state and local regulations before discarding them.

The Lender Sells the Vehicle

After a vehicle has been repossessed and returned to the lender, the lender begins liquidation. The exact process for selling a repossessed car varies from lender to lender, but small lenders may attempt to sell the vehicle themselves while larger lenders with a higher volume of repossessions may simply send the car to auction. When the vehicle sells, repossession, sales and auction fees are deducted from the remaining balance owed on the car. If the amount brought in by the vehicle's sale is not enough to repay the entire outstanding debt, the borrower is typically responsible for repaying the remaining balance (even though he is no longer in possession of the car).

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How to Qualify for a Car Loan

Qualifying for a car loan in itself isn't as hard as you might fear. Car dealerships often work with individuals with good, bad or no credit at all to help them drive away in the automobile of their choice. After all, their goal is to sell as many cars as possible each month. However, qualifying for a car loan with a good interest rate is rewarded to those who can show past responsibility with their personal finances.

Instructions

How to Qualify for a Car Loan

1

Find a co-signer, or better yet, establish good credit. People with no credit can often qualify for a car loan, but they'll need someone to agree to co-sign for the vehicle first. Establishing a credit history of your own is imperative to receiving a good interest rate on a car loan without the assistance of a co-signer.

2

Pay your bills on time. It's a good rule of thumb to wait at least 6 months for your credit report to reflect a regular payment history for the lines of credit you've obtained. During the 6 months prior to applying for a car loan, any missed or late payments will reflect negatively on your report and influence your credit score. In 2009, a credit score of 620 or below is considered risky by many loan agencies, while any score above 680 is considered good. However, this scale changes periodically, and current score ranges are kept updated on myfico.com (see Resources below), the official Web site for the FICO credit scoring system. Naturally, the higher your credit score, the lower your interest rate will be approved at.

3

Shop for deals. Many car manufacturers will advertise special rebates or offers. The lower the price of the car, and therefore the lower the loan amount, the higher the chances you will be approved for it. Other tips that might help in this aspect are to apply any cash-back amounts toward your down payment or trade-in value. Negotiate the price of the vehicle you're hoping to purchase before agreeing to sit down and fill out an application.

4

Make a down payment. Having money for a down payment of 5 to 10 percent of the asking price of the vehicle for which you're applying shows lenders that you are serious about investing and are financially responsible. Trading in a car adds value to your down payment as well.

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How to Lower My Interest Rate on My Auto Loan

A car loan can create a significant financial burden for anyone, even someone with a steady income and a low amount of debt. Hefty interest is tacked on to car loans. This can become frustrating for the borrower. However, you do not have to just settle for the given interest rate assigned to your car loan. Refinancing is an avenue for you to negotiate for a lower interest rate.

Instructions

1

Call the company that currently holds your car loan and ask them what the requirements for an interest rate reduction are and if you qualify for any reduction. These requirements could be an unexpected financial hardship, notice of a more competitive rate or whatever the company chooses.

2

Call and search online for several banks, loan companies and credit unions and ask about interest rates on car loans.

3

Write down all information given by each company. You may want to make a chart or comparison table.

4

Visit websites such as Bankrate.com or CapitalOne.com to access car loan rate calculators and loan comparison tools available there.

5

Choose a company and apply for a refinancing loan.

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Can You Change Which Bank You Use on a Car Loan If the Paperwork Has Not Gone Through?

As long as your paperwork hasn't been processed by your lender, you can switch auto loan providers. If you haven't signed contracts or received the loan amount, you shouldn't have a problem. If you have an approval from a dealership, it can easily switch your lender. A loan approval does not require you to borrow from the lender who approved you.

Dealeship Financing

If you're using a dealership for financing and haven't picked up your vehicle yet, you can change loan providers. Dealers handle loan contracts for lenders they use and don't lend directly. Your loan isn't in place until you pick up the vehicle; only then can the dealer submit your signed lending contracts to the loan provider. If you took possession of a vehicle and signed loan contracts, you might not be able to change loan providers unless you make the request the same day. Ask your dealer directly if you can change loan providers if you've already signed contracts.

Direct Lender Financing

If you're preapproved for a loan through a lender or submitted your information, you don't have to complete the process. Unless you sign your contracts and take the money, you can choose a different provider. Call the lender who approved you, and let it know you don't want to proceed with the loan process. If you found a loan with better loan options, such as a lower interest rate or more affordable down payment, use the opportunity to allow the lender to beat the other lender's offer.

Binding Paperwork

Once you signed all of your loan paperwork, paid the seller and took the vehicle, you are legally bound to your loan contract. In this case, your paperwork is in the processing stage. You might not have made your first payment yet, but your account is likely already reported to the credit bureaus. You can't change your loan provider at this point and doing so will cause you to default on your loan contract. You'll have to pursue a refinance instead.

Refinance

Refinancing a vehicle requires you to apply to a different lender for the car's loan balance. The new lender will pay off the old lender to become the new lien holder. Before you decide on refinancing, determine if your current lender charges a early payoff penalty fee. Most lenders don't, but the charge can be costly. You might have to offer a down payment when refinancing if your original purchase was a new car. Once you take ownership of a new vehicle, it becomes used and its lending value changes.

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When Is the Sale Final When Buying a New Car?

A new car is a significant expense and one that you're likely stuck living with for a number of years. New cars offer the security of a factory warranty and the knowledge that no other driver has damaged or mistreated the vehicle. Once you sign the papers, the car is yours unless you fall into a situation that delays the sale from becoming official.

Documentation

The purchase contract that you sign when you buy a new car is a legally binding document. This means that you're required to comply with the terms listed, and so is the dealer. If the purchase contract doesn't state terms for a return policy, there is no such option. Once you sign the papers you own the car, and the dealer is under no obligation to return your money. This is why it's so important to understand what you're signing. If you don't understand a document, ask the dealer to explain it to you. If you still feel uncomfortable, ask someone you know with more legal knowledge or car-buying experience to come with you to the dealership and review the documents.

Return Policies

Some new car dealers offer limited return policies. These are optional policies that dealers offer for a specified period, such as three days or five days. Because dealers set their own return policies, they also set the terms. Drivers may be liable for a mileage fee for any use of the new car, or a restocking fee as a percentage of the car's value. When there is a valid return policy, the sale is final as soon as the return period elapses.

Loans

If you use an auto loan to buy a new car, the sale isn't final until you pay off the loan in full. While the papers that you sign complete the car dealer's role in the transaction, you also enter into a transaction with the new owner: the lender. As you make payments you build up equity and own a larger and larger portion of the car. However, the sale isn't complete until you make your final payment and receive the title from the lender. This means you can't sell or trade your car until the loan is paid off or you receive special permission from the lender.

Lemon Laws

Some states have lemon laws for new car buyers to protect drivers from dealers who sell vehicles with major mechanical problems. Lemon laws that apply to new cars typically cover them for a period of up to one year from the date of purchase. These laws require drivers to make multiple repair attempts and notify the dealership or automaker in writing before pursuing a lemon law refund. In cases where automakers refuse to honor their warranties and can't repair a vehicle, the state may be able to force the dealer to issue a refund or replacement vehicle. Once a driver owns a car beyond its lemon law protection period, the sale is irrevocable and the dealer is under no obligation to issue any refund.

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How to Get a Lease for a Vehicle With Bad Credit

A poor credit history hurts your chances of obtaining a vehicle loan at a low interest rate, but it can also hurt your ability to lease a car. Car dealerships run credit checks on individuals interested in leasing vehicles for the same reason they review credit scores before offering financing to buyers -- doing so helps the dealership avoid unnecessary financial risks. If your poor credit history is standing in the way of your ability to lease a car, however, you have options at your disposal.

Instructions

1

Offer to make a security deposit on the vehicle you want to lease. A substantial security deposit reduces the risk a dealership takes by leasing to you. In the event you default on the lease and the car dealership must repossess the car, your security deposit helps cover missed payments and repossession fees.

2

Ask someone with good credit to co-sign the lease with you. A co-signer's good credit helps you get approved for the lease, since the car dealership has the legal right to pursue the co-signer for any missed payments or additional fees you incur during the course of the lease period.

3

Provide the dealership with a larger than normal down payment. Your larger down payment up front reduces the amount of your monthly lease payments. The dealership knows that the lower your lease payments are, the easier you can afford them.

4

Lease an older vehicle, rather than a brand new one. A vehicle that is several years old is worth far less than the same model car brand new. Because the car is worth less, the dealership incurs a lower risk of financial loss by agreeing to the lease.

5

Take over someone else's lease. Although the company holding the lease will still require you to pass a credit check, credit requirements for lease assumptions are typically less strict than those for acquiring a new lease.

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How to Lease an Auto Vehicle

If you want to get a new car, leasing the vehicle is one of your financing options. Leasing allows you to keep the vehicle for a set period of time. At the end of that period, you can simply return the vehicle to the car dealer, keep the vehicle and finance or pay for the balloon payment amount, or trade it in for a new lease on a new vehicle. Leasing a vehicle does typically require a down payment, which varies by car dealer.

Instructions

1

Visit local car dealers to see new cars in person, and test drive those that you are interested in leasing. This allows you to select a vehicle that meets your needs in terms of price, features and performance.

2

Check your FICO credit score to make sure that your credit score is high. Typically you need to have top tier credit to qualify for a lease, which is above 720. You can check your FICO score on the My FICO website (see Resources) or use their free score estimator. As of November 2010, the price to check your score starts at $15.95.

3

Look at your current odometer reading in your vehicle to try to determine how many miles you drive each year, if you are not sure. This is important because when you lease a car it comes with an allotted number of miles that you can drive each year. If you drive over that amount, you have to pay a penalty for each mile that is over your limit.

4

Get quotes from all of the car dealers where you are interested in leasing your vehicle. Let the dealers know what term you want and how many miles you need per year. Terms typically range between 24 months and 48 months. Annual miles usually range between 10,000 per year and 15,000 per year.

5

Go to the dealer that gave you the best price to lease your vehicle. Before you sign the lease agreement, read over it to make sure everything that you verbally agreed to is reflected in the agreement.

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Requirements for Leasing a Car

Leasing and financing requirements are similar, although leasing is more restrictive. Leasing banks often require increased insurance coverage and limits, gap insurance and good to excellent credit. Before pursuing a lease, determine which information you can expect to provide your dealership and bank. If you're declined for a lease, you may have other options.

Contract Requirements

Leasing requires you to choose a term and mileage allowance. Most leasing companies allow lessees to choose from 10,000 to 18,000 miles per year and a term of 24 to 60 months. While you may not find these specific options advertised, most leasing banks allow you to adjust lease terms to fit your driving needs. Your contract will outline your mileage allowance and over-mileage fees. Read your contract thoroughly to assess termination, wear-and-tear and lease-end fees. You must pay for any items you agree to at the end of your lease.

License and Insurance

Expect to provide a valid license for the state where you plan to register your leased vehicle. As part of the leasing contract, the bank requires full-coverage insurance that you must maintain on the car throughout the contract term. Usually, this insurance consists of collision coverage, increased minimums for bodily injury and property damage coverage and lower deductibles than your insurance company allows. Proof of coverage listing policy limits and dates of policy term are required before you can take your vehicle from the dealership.

Gap Insurance

Some leasing banks require lessees to purchase gap insurance. In the event that your vehicle becomes a loss, your collision coverage will pay the vehicle's market value to the leasing bank. Because most leased vehicles are purchased at sticker price, depreciation only catches up with the car's actual market value around the end of the lease term, or about 3 years. Gap insurance pays the vehicle's total value to the leasing bank if it becomes totaled or stolen. The policy can cost less than $100 in states that cap the price, but more than $600 in states that don't.

Good to Excellent Credit

You must have good to excellent credit for lease approval. While you can often obtain an approval with an adjusted interest rate for a traditional finance when you have credit issues, leasing banks either approve buyers or they don't. Additional rate options aren't offered. You may also use a co-signer for your lease if you aren't approved. Leasing banks consider the co-signer's credit rating and income to determine lease approval. If you can't obtain a lease approval, you may want to pursue traditional financing to purchase the car instead.

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How Do Credit Unions Verify Employment for Auto Loan?

Credit unions may verify employment before making an auto loan if it is their standard policy or if your credit situation warrants the verification. However, employment verification is not necessarily a requirement for an auto loan.

Function

When applying for a loan, employment verification allows the finance company to determine if they are making a smart financial decision by lending you money.

Types

If your credit score meets a certain threshold, which varies by lender but is normally around a FICO score of 700, you may get an "auto approval" from the lender, meaning that no further documentation for employment verification is necessary. If your score is lower or you have a lot of debt, employment verification may be required.

Identification

When required, employment verification is normally done by submitting a current pay stub or W2 to the finance company. If buying from a dealership, you may submit this information to the dealership, who will forward it to the credit union.

Considerations

Self-employed individuals may be ineligible for credit union financing if employment verification is required. However, established self-employed individuals with tax returns proving their income could have a chance, but it is necessary to submit proof of income.

Warning

If a credit union is requiring employment verification and you are unable to furnish it, do not provide forged pay stubs. Instead, look for other lenders with fewer requirements for credit approval. You may pay a higher interest rate, but they will help you build your credit.

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Buying vs. Leasing: Effect on Auto Loans

When it comes to leasing vs. buying, there is no definite answer on which option is better. It depends on each individual situation and the goals a vehicle buyer pursues when making the purchase. A consumer must consider all aspects of leasing and buying: commitment terms, costs, monthly payments and depreciation of the vehicle.

The Term of Commitment

When considering a new vehicle, a consumer must determine how long he will keep it. If he likes to drive new vehicles and wants to get a new model in a couple of years, leasing may be the best option. Lease terms vary from two to four years, whereas loans can be arranged for up to six years. However, a consumer may have to pay penalties for terminating the lease early. If he has a loan, he can pay it off at any time, and most financial institutions don't charge prepayment or pay-off penalties.

The Costs

A lease and an auto loan have initial costs associated with them, such as down payment and other fees. Most leases require a down payment and a first-month payment at the time of signing. Most lenders don't finance a full value of the vehicle, and consumer may need to pay the difference out of pocket. Consumers must pay taxes and license fees when they purchase a vehicle. While the initial costs may be about the same for both, unlike loans, leases have end-of-the-term charges, which may include extra mileage and excessive wear.

Monthly Payments

Leasing is similar to a long-term car rental. The lessor pays a low monthly payment, which covers the car's expected depreciation, plus charges, such as taxes and fees. Loan payments include principal, interest and may include other charges, such as credit insurance and late-payment fees. Loan payments depend on the loan amount, the term and the interest rate, which makes them higher than lease payments.

Vehicle Depreciation

A lessor has an option to purchase the vehicle at the end of the lease term. In many cases, the price is too high because the vehicle has depreciated. Depreciation depends on several factors, such as popularity of make and model, the cost of maintenance and how much the vehicle has been in use. Some vehicles depreciate faster than others. If a lessor is considering buying the vehicle at the end of the term, he needs to calculate the depreciated value of it and compare it with the purchase price.

Unlike leases, depreciation usually doesn't play a big role when it comes to loans. For newer used vehicles, loan payments will be ahead of depreciation. With new vehicles, the owner may be "upside down" on the loan if he sells the car within the first 12 to 18 months of the loan. New vehicles depreciate as much as 20 percent as soon as they leave the dealer's lot. If a consumer plans to keep the vehicle only a couple of years, a short lease may be a better option.

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Vehicle Finance Information

Next to your home, your vehicle is one of the most expensive things you'll ever buy. Most new vehicles are priced above what buyers can afford to pay in cash, which means there's an ongoing need for vehicle financing opportunities. When you finance a vehicle, you pay more in the end, but an auto loan can also be part of responsible financial behavior.

Process

To finance a vehicle you need to apply for a loan through a bank or private commercial lender. Car dealerships have working relationships with lenders that operate locally and provide loans specifically tailored for buying new and used cars. Auto loans are identified by APR ratings, which refer to the annual percentage rate that you'll pay in interest.

Since your auto loans arrives as a monthly bill, you can determine how much you'll pay in interest by dividing your APR by 12. For example, a 6-percent APR loan will charge 0.5 percent of the total balance as interest. If you owe $20,000, this equates to $100 per month. Most auto loans last for five years, but loan offers and terms vary from one lender to another.

Eligibility

Lenders don't offer the same auto financing to all buyers. Instead, buyers with a higher credit rating, who are more likely to be able to pay the loan back on time, receive the lowest APRs, while buyers with poor credit may need to pay more in interest. Lenders also consider a buyer's income, debt level and the cost of the vehicle in computing a loan offer. In some cases, lenders will work with dealers to offer special low APRs only on specific models or certified used vehicles as a means of attracting buyers' attention.

Tips

You can save money when you finance a vehicle in a number of ways. A larger down payment will not only reduce the amount you have to pay back but also the amount that you'll pay interest on. If a dealer offers to defer fees or reduce your down payment, remember that this amount will add to your loan's principal and cost you more in interest. Instead of negotiating for a monthly price, negotiate the dealer's lowest sale price for the vehicle. Then make the biggest down payment you can comfortably afford.

Alternatives

Not every vehicle purchase needs to be an occasion to go into debt. If you can afford a down payment of several thousand dollars, consider a used vehicle. Some used vehicles come with limited dealer warranties or certification from the automaker that reduce your liability if anything goes wrong shortly after you make the purchase. A used car may also save you money on insurance since it will cost less to replace in the event of an accident.

An auto lease is another option. A lease is essentially a long-term rental, usually with a three-year term and a monthly payment lower than the monthly payment to finance a car. At the end of the lease term, however, you must surrender your vehicle or pay a predetermined buyout payment.

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How to Get Out of a Signed Contract for Buying a Car

If a dealership cannot match you up with a bank willing to finance your purchase, the dealer can void the contract you signed and ask that you return the vehicle. If you are the one who needs to get out of the purchase contract, however, your options are limited. When you sign an agreement to purchase a vehicle, your signature gives the dealership the right to pursue you for payment of the vehicle and even take legal action against you if you refuse to honor your end of the agreement. In certain situations, however, you can get out of a vehicle purchase agreement after signing on the dotted line.

Instructions

1

Talk to the manager at the dealership and explain why you cannot go through with the purchase. The car dealership's manager has the ability to void your purchase contract. While there is no guarantee that the manager will do so, if your story falls on sympathetic ears, the manager may just tear up your contract.

2

Read through the purchase contract for a return policy. A common consumer misconceptions is that you have three days to return your vehicle after purchasing it. While dealerships are not required to grant you this provision, some do in effort to further customer relations. If your contract contains a three-day right of revision, you can get out of your signed contract by returning the car within 72 hours after purchasing it.

3

Demand that the dealer take the car back under your state's lemon law statute. All state lemon law statutes differ, but in general if you have had the car repaired more than four times for the same issue and the issue remains, you can escape your contract due to the car's status as a "lemon."

4

Refuse delivery of the car. If you have a certain vehicle in mind but the dealership does not have the car in stock, it will order it for you. If you change your mind before the car arrives, refuse delivery of the vehicle and offer to compensate the dealership for their storage fees and the documentation fees necessary to prepare your paperwork in exchange for voiding the contract. Provided you did not finance the vehicle through the dealership, the dealership may accept your offer since it recovers a profit on the vehicle and can still sell it to another customer.

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Can You Redeem Your Car After Reaffirming the Loan?

Once your lender repossesses your vehicle, you have a window of opportunity to purchase the vehicle back from your lender. Your auto loan provider may request that you pay off your loan, in addition to late payments and collection fees, or that you pay your past-due amount and additional fees.

Time Frame

After repossession, your lender will send you a letter stating the amount you owe to purchase your vehicle or reinstate your loan. The letter will also state the lender's intent to sell the vehicle and the date it plans to do so. Most repossessed vehicles are resold at auction, often about two to three weeks after repossession. This time frame is the only opportunity you have to purchase your vehicle back from your lender. Once the car is resold, you cannot have the car back unless you purchase it from the buyer.

Vehicle Sale

If you don't collect your car within the stated time frame, your lender will sell the vehicle privately or at auction. A private sale warrants more money than an auction sale, as auction cars are sold at wholesale value. If you owe more than your vehicle's sales price, you must pay your lender for the remainder of your loan balance. If you owe less than your vehicle's sales price, your lender must return the profit to you once it collects the loan payoff amount and deducts for any collection or late-payment fees.

Vehicle Resale

You may find that you can purchase your vehicle for less than you owe on your loan. If you know someone who has a dealer's or wholesaler's license, you may ask that person to bid on your car on your behalf. Most auctions are not open to the public. Auction vehicles are often sold locally, so you may find that you can purchase the vehicle from another dealer after the sale. You might be able find the wholesaler or dealer reselling your vehicle and purchase it. Unfortunately, finding the vehicle might be hard to do.

Balance Due

If your vehicle is sold at auction, you must continue to pay your car loan if your car sold for less than you owed. Although you can't have your car back, you're still responsible for the amount owed on the original loan. You can likely work out a payment plan with your lender for less than your monthly car payment amount. Otherwise, if you don't pay, your lender may eventually sue you and garnish your wages to collect the balance due.

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Can I Sell My Car if the Bank Is the Lien Holder?

You must follow your bank's and state's procedures for selling a car with a lien holder. Expect to satisfy your loan before the lien holder releases its portion of ownership. In some states, the lien holder also holds the car's title until the loan is satisfied, so it may take several weeks before you can transfer the title to the new owner.

The Payoff Process

You can use the money you get from the car sale to pay off your loan balance. But if you owe more than your car's selling price, you'll have to pay the remaining loan balance yourself before your bank releases the car's title or lien release. If you borrowed from a local bank, ask if you can pay off your loan and obtain the car's lien release or title the same day. If the bank isn't local, plan ahead by obtaining the payoff instruction and determine how long it takes to retrieve your title transfer paperwork.

Determining Value

Before you sell your car, find out if you'll have to provide extra money to pay off the car's loan. Check the resale value of your car by using appraisal websites. Edmunds.com or the Kelley Blue Book website offer private sale values based on vehicle condition and mileage. Check local classified advertisements to determine the market conditions in your area. Some market conditions, such as season or gas prices, affect car values. Price your car properly to make your sale. Subtract your payoff amount from your vehicle's resale value and arrange your funds before selling the car. You can keep any profit you make from the sale if you owe less than the vehicle's resale value.

Your State's Title Transfer Rules

Some states don't require lien releases to transfer vehicle titles. Buyers, however, usually know enough about the risks of purchasing a vehicle with a lien to avoid the purchase if you can't provide proof of your loan payoff. Selling the vehicle doesn't excuse you from paying the loan, and the vehicle can be repossessed from the new owner if you stop making payments. Otherwise, most states require proof of a satisfied lien. Depending on your state, this might include the lien holder's signature on the title, a lien release or a new title in your name only.

Completing the Sale

If you can't immediately obtain your title transfer paperwork because of your lien holder's payoff and paperwork procedures, let the seller know when you expect to receive the paperwork and complete the sale. To reassure the buyer, sign a bill of sale stating your intention to sell the vehicle and that you'll transfer ownership the day you receive your paperwork. If your buyer is financing the purchase, ask him to consider financing with your lender. This way, the ownership transfer process is quickly handled by the bank.

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How to Handle a Bargaining Table in Buying a New Car

New cars cost thousands of dollars, but the price is negotiable. All new vehicles have a Manufacturers Suggested Retail Price (MSRP) in their windows listing the standard equipment and options and itemizing the costs. The total is known as the "sticker price." Ignore the MSRP, advises Philip Reed, an advice editor at the Edmunds auto research website. Consumers who do their research and who are willing to bargain with dealers can usually pay much less than that price.

Instructions

1

Check availability of the new car you plan to purchase in online dealer inventories. You have more bargaining power for slow-selling or overstocked models, and Joe Wiesenfelder of the Cars.com vehicle information site explains that these models are more likely to have available rebates. Your negotiating ability drops if you want a rare or a very popular vehicle.

2

Print out invoice information on the car you wish to purchase and any current consumer and dealer incentives before visiting the dealership, Reed advises. This data is readily available for free through car research sites like Edmunds and Kelley Blue Book.

3

Calculate a fair price for your desired vehicle based on its availability and any rebates and dealer incentives. You can often get cars in ample supply at or near the invoice price.

4

Tell the salesperson you are unsure about trading in your old vehicle, even if you intend to do so. Wiesenfelder recommends keeping trade-in negotiations separate to get the best deal. He states that most people get more money for their old cars by selling them privately or shopping them around to multiple dealerships.

5

Tell the salesperson your price and explain that it is a firm offer, not a starting point. Salespeople are used to back-and-forth negotiations that often take a lot of time. State that you want a direct answer on whether your price is acceptable, and that you will buy the new car if the dealer agrees, or leave if the answer is no.

6

Leave the bargaining table if the salesperson takes too long. Get up and walk outside to the car lot and browse at the vehicles, or give the salesperson a time frame up front. For example, state, "I know you have to check with your manager, but I don't have time to waste. I must leave if you are not back in five minutes."

7

Visit another dealership if the initial car dealer does not agree to your price or does not handle the bargaining process in a satisfactory way. You will find a dealer who agrees to your price if you calculated it accurately. Contact dealers through their Internet sales departments if you get tired of visiting them in person.

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Can I Co-Sign on a Car With a Bankruptcy?

Creditors view you as a high-risk borrower if you have previously filed bankruptcy because you have a track history of failing to repay your debts. Consequently, you have may trouble obtaining financing after a bankruptcy. Your inclusion as a co-signer on a loan application could cause the lender to decline the application regardless of your co-borrower's credit history. Nevertheless, a past bankruptcy does not necessarily preclude you from obtaining future credit.

Co-signers

Lenders use the term "co-signer" to describe people who borrow money without having an ownership stake in the collateral being financed. Generally, people add co-signers to their loan applications if the addition of a co-signer somehow improves their chances of obtaining credit. A co-signer with a good credit score can strengthen a loan application, as can the addition of someone with a high income level. If you co-sign on a loan, your past bankruptcy weakens the application although you may also help it the application if you have a high income level and minimal debt.

Financing

Each lender sets its own underwriting standards, but few major lenders offer financing to people who have had a bankruptcy within the last two years. However, if you apply for a loan alongside a creditworthy individual, the lender may allow you to co-sign because the other borrower's credit and income offsets your credit score. In such instances, you can "coattail" the co-applicant's credit, which means you gain access to credit you could not otherwise access. The new loan appears on your credit report and if you and the co-applicant pay the monthly bill on time, the positive payment history starts to raise your credit score. Thereafter, you can obtain credit in your own right much more easily.

Subprime Lenders

You can co-sign on a car loan or even obtain a car loan in your own right if you apply for a loan with a subprime lender. These firms offer credit to people who have credit scores below 620 and to people who could not otherwise qualify for loans because of past bankruptcies or similar events. Subprime lenders mitigate the risks involved in lending to people with poor credit by charging very high interest rates. View subprime lenders as the lenders of last resort because aside from high interest rates, many of these lenders also assess hefty upfront fees and prepayment penalties.

Considerations

Most debts remain on your credit report for seven years, but Chapter 7 bankruptcies remain on your credit report for 10 years. The rules that lenders impose to make financing difficult for people with bankruptcies are designed to protect the lender rather than to help you. However, if you had trouble managing your debts in the past, you may have trouble in the future.

Before taking on new debt, seek out the services of post-bankruptcy counselors, who can give you advice on how to better handle your finances in the future. Coattailing as a co-signer on a car loan may seem like a quick and easy way to start building your credit, but if the co-borrower defaults on the debt, you are responsible for repaying the loan. That could lead to new financial problems.

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What Is Required to Obtain a Title Loan?

Car title loans, sometimes known as just title loans, offer credit-challenged consumers an option for obtaining cash in an emergency. These loans often require little more than a valid car title and some identification, but consumers should exercise caution to avoid expensive debt and the possibility of having the vehicle repossessed.

Car Title

When a consumer takes out a title loan, the lender uses the value of the borrower's car to secure the loan. The lender holds the title to the vehicle during the term of the loan, and may file a legal lien on the vehicle to ensure debt repayment. If the borrower does not repay the loan, the lender may repossess the vehicle and sell it to recover the balance owed. For this reason, title lenders usually require that the borrower own the car outright and have no other liens against the title. According to the lender USAuto Title Loan, borrowers must present the vehicle's title when applying for the loan and verify that they have paid off any outstanding loans that the car secured. In addition, according to the Consumer Federation of America, some lenders require the borrower to provide a set of keys to the vehicle, as these keys will make repossession easier should the need arise.

Identification

USAuto Title Loan notes that borrowers must be at least 18 years old and have a stable, permanent residence. For this reason, title lenders usually require borrowers to present some form of identification, like a driver's license or state ID card, when taking out a title loan. In some cases, the lender may also require a current utility bill bearing the borrower's name; this kind of document re-affirms that the borrower actually lives at the address listed on the driver's license. A valid state-issued identification also helps lenders verify that the borrower actually owns the car used to secure the loan.

Documented Income

Before issuing a title loan, many lenders require borrowers to prove their ability to repay the balance. For some lenders, a collection of recent pay stubs may provide this verification. Other lenders may also require several recent bank statements that show not only the borrower's income, but typical expenditures and other outstanding debts. The Consumer Federation of America notes that title lenders typically cater to credit-challenged customers and, for this reason, rarely require a credit check in addition to the borrower-provided income verification.

Considerations

Because title lenders often cater to credit-challenged customers, the Consumer Federation of America expressed concern in a 2007 document that lenders unfairly target less prosperous clients who may be unable to repay the debt. If the lender repays, according to the Consumer Federation of America's 2007 report, the effective interest rate averages around 300 percent for one-month loans and can climb as high as 780 percent for two-week loans. For this reason, borrowers may consider exploring other options, including credit cards and personal loans, before taking out a title loan.

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