Financial Advice on a Lease Vs. Purchase of an Auto

A vehicle lease or purchase offers different benefits. Leasing restricts driving and car use through term and mileage limitations, so the option is not for everyone. A purchase may prove a better option for a driver who prefers to keep his car although leasing may prove beneficial to someone who normally trades out of a car every three to four years. Long-term Pricing Leasing may initially show a low monthly payment, but your overall cost may be the same as a finance or purchase during the term you choose for the lease. Manufacturers offer...

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Can a Lender Repossess a Car Without a Legal Lien?

When a lender tries to repossess a car, he's exercising his rights under a legal document known as a lien. When a lender provides money for a car purchase, there is a possibility that the borrower may not pay him back. A lien provides security against this risk. It is important for borrowers to understand the basics of liens and to know their rights in the event of a repossession. Basics of Car Liens A lien is a legal document that secures...

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Can You Get a Car Loan in Ohio Without a Co-signer if You Are 20 Years Old?

Getting a car loan in Ohio as a 20-year-old is similar to getting a loan in any other state. While many 20-year-olds use a co-signer to get a vehicle loan, it is possible to secure your own financing without the need for a co-signer. There is nothing unique to Ohio about the process. Not using a co-signer may result in a higher interest rate, depending on your credit rating. Do You Have a Job? To qualify for an auto loan in Ohio, you need to show proof of income. Usually this means a full-time job. Being a full-time or part-time student...

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Can a Lender Sue You for Default on an Auto Loan?

Car loans are common financial tools for purchasing new and used vehicles, because few people have the liquid assets available to pay the full purchase price for a vehicle. A car loan typically requires monthly payments, which include a portion of the principal and interest charges. If you default on your payments, your lender may sue you for the principal and legal costs. Time for Default A default technically occurs if you are even one day late on a car payment. However, lenders rarely take legal action on a loan if you are not severely...

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How to Calculate a Loan Amount Based on a Payment

The principal of a loan is the initial amount of the loan, and the interest on the loan is an additional amount that the lender charges you for the loan. You will generally repay the loan by making fixed payments at regular intervals. You can calculate the loan's principal from the interest rate, number of payments and the amount of each payment. Interest Calculate the interest rate for the payment interval. Assume the annual interest rate on the loan is 9 percent. Divide this interest percentage by 100 to get a decimal number of 0.09....

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How to Successfully Get Your Car Loan Reinstated

When you finance a vehicle, the vehicle serves as collateral for the loan. Should you neglect to make your payments, your lender reserves the right to repossess the car and sell it to cover the remaining balance of the loan. The amount of time that will pass between the date you stop making payments on your car loan and the date the lender repossesses the vehicle will vary by lender. In many cases, however, you may be able to pay the amount you owe,...

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Car Buying Rules on a Three-Day Grace Period

Whether you signed a new, used or leased car agreement, there is no three-day grace period on automobile purchases in the United States, regardless of personal circumstance. However, there are options if you change your mind because of a mechanical problem with the car or your own financial state. Lemon Law If your newly purchased car has mechanical problems, consult your state's lemon laws for information on returning the vehicle for a full...

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How to Lease Local Cars

Leasing an automobile gives you the opportunity to drive a nicer car, while saving money on your monthly payments. Leasing is different from purchasing a car. Leases typically last from three to five years, but at the end of the lease term, you're obligated to return the vehicle in good condition. This arrangement suits anyone who enjoys driving a new automobile every few years. Before leasing a vehicle, however, it's best to know the process. ...

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How to Compare the Savings in a Standard MPG Car to a Hybrid Car

Standard cars run off a combustion engine that burns gas. In contract, hybrid cars fuse a combustion engine with an electric engine --- hence the name "hybrid," according to the Oak Ridge National Laboratory --- and therefore often use less gas, thereby resulting in a higher miles-per-gallon rate. A higher mpg can help you save money every time you fill up at the gas pump. A simple calculation can help you determine just how much money you save, and may be a helpful factor to consider when you're buying your next car. Instructions 1 Read...

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How to Compare Auto Refinancing

After improving your credit score, you may consider an auto refinance to see if you qualify for a lower rate. Lower interest rates on car loans can knock down the price of a car loan and save you money each month. Plus, auto refinancing works if you want to extend your auto loan for an additional four or five years, and reduce your monthly obligation. But before choosing a lender, compare different auto refinancing quotes to get the best deal. Instructions 1 Pull out your current auto loan document. Review the document for information on...

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Auto Leasing vs. Buying

Many benefits exist for leasing or buying a new car, but possible lessees must stick to certain bank requirements and restrictions. If financing, none exist beyond your monthly payment responsibility. Both options can provide a low payment that fits your budget. Weigh the pros and cons of either purchasing option so you can decide which is right for you. Benefits The benefits of lending are obvious: making your payments results in your complete vehicle ownership at the end of the term. If you decide to lease, you can usually enjoy a lower...

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How Does "Cash Back" at Car Dealerships Work?

Cash back offers, also known as a rebate, are automatic price discounts deducted from a vehicle's selling price. Rebates are offered from the manufacturer, not from an individual new-car dealer, so you should still plan to negotiate your sales price. Rebates don't usually offer a sales tax deduction, despite the reduction in sales price. Resources Cash back offers are advertised on manufacturer websites. The discounts are offered by the manufacturer and usually, you only need to purchase the vehicle to take advantage of the discount. Read...

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Tips on How to Test Drive a New Car Without Buying It

Test driving a new car can be exciting. Everything works perfectly, you have nowhere in particular to be and you get to experience the feel of a vehicle that is alien to you. Salesmen may push you to buy a car from the moment you walk into a dealership, no matter if you're ready to make your decision. Stand firm about what you're looking for in a test drive experience. Investing in a new car is a long-term financial decision and not one you should...

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How to Buy a Vehicle With Outstanding Finance

Some states do not allow title transfers while a lien holder exists on the vehicle title. Whether you live in a state that does or not, make sure the current loan is paid off before you pay and take possession of the vehicle. Even if your state allows these types of transfers, the bank's collateral, or vehicle, can be repossessed from you if the original borrower does not pay. Motor Vehicle Requirements Call your state's motor vehicle department to determine what paperwork is necessary to transfer vehicle ownership. Ask specifically about...

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How to Get Financing From a Bank for an Auto Loan

Car financing is commonly offered straight through the dealership, but you can also choose to get financing at a bank to get greater control over the financing terms. Showing up at a dealership with bank financing also gives you negotiation power, as you have a guaranteed loan and don't have to rely on any special deals or offers that the dealership may try to offer you. Instructions 1 Check banks for car loan rates. Banks usually disclose the lowest car rates on their website, although that might not be the rate you actually get since it...

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Can the Co-Borrower Request My Car Be Repossessed?

When you default on a vehicle loan, the lender may repossess the vehicle by force to recover the debt. Some borrowers may request that the lender repossess the vehicle when they fall behind in payments, but most repossessions are not voluntary. In most cases, either the primary borrower or the co-borrower can authorize a lender to repossess a vehicle if the loan is in default. About Repossession Repossession occurs when a borrower defaults on a loan secured with collateral. To recover the debt, the lender takes possession of the collateral...

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How to Check for Outstanding Financing on a Car

You cannot legally complete the purchase of an automobile if the car is still financed--unless you pay off the lien holder as well as the seller of the car. Liens are placed on a car when it is financed, protecting the lien holder from being cheated out of the transaction if the car is resold. The buyer can resell the car, but the debt to the lien holder must be satisfied before the new owner can legally gain possession and obtain tags and title....

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How to Finance Classic Vehicles

If you are looking at a classic vehicles and do not have the money saved up for the purchase, it can be difficult to get financing. Typically classic cars are sold by collectors, which means that you must secure your own financing. Since the usual car valuation guides, such as Kelley Blue Book, do not offer values for collectible automobiles, you have to focus on specialty lenders for financing. Instructions 1 Get your free yearly credit report from each of the three credit bureaus through the Annual Credit Report website (see Resources)....

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How to Convert a Lease Money Factor to an Interest Rate

Auto lease payments are often calculated using a lease factor instead of an interest rate or annual percentage rate (APR). The use of a money factor makes calculating lease payments easier for the dealer but keeps the actual interest rate of the lease a mystery to the car buyer. The ability to convert the lease factor allows the buyer to make sure that the lease rate is competitive and that the dealer is not trying to take advantage of the lease...

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Can I Get Financing for a New Car If My Credit Is Poor?

Auto loans are among the easiest loans to qualify for, even for people with bad credit. And even if you have bad credit, if you have a high enough income you are likely to qualify for a number of higher interest rate auto loans. That said, even high-risk auto lenders will not extend loans to borrowers whose credit is below certain limits. Checking Your Credit Report Before applying for a loan, check your credit report so you know exactly where you stand. Federal law allows you to order your own credit report once per year for no charge....

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What Is a Normal Auto Loan Rate?

Some financial websites regularly publish average interest rates for the various types of debts, including auto loan interest rates, to keep the public updated. Check on these averages to see if the rate quote youre getting from your bank is normal and fair considering your current credit situation. Average Auto Rates The national auto loan rate was 5.41 percent for a 5-year loan on a brand new car, 5.38 percent for a 4-year loan and 6.44 percent for a 3-year loan to buy a used car as of September 22, 2011 according to Bankrate. The normal...

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How to Take Over a Defaulted Car Payment

If you want to help someone behind on a car loan, pay the past due amount. To take over payments, apply to the lender for the loan amount or pursue your own financing. Unfortunately, you cannot just transfer a loan into another person's name. Every loan approval is based on individual credit information, which affects approval term, rate, down payment requirements and ultimately monthly payment amount. Once approved for the loan, you must pay taxes on the vehicle's price and complete the vehicle transfer at a state motor vehicle office. Instructions...

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Can You Get a Car Loan If You Are Unemployed?

There are certain situations that will allow you to receive a car loan even if you are unemployed. If you meet the lending criteria for financial institutions, they will approve your loan. Consistent Income If you have the ability to pay, you can be approved for a car loan. There are sources of income such as Social Security, pension, interest income, disability income, VA benefits or court-ordered child support that may qualify you for a loan. Credit History Lending institutions will consider you for a car loan if you have the willingness...

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What to Ask When Buying a Car?

Car ownership is an essential part of everyday life for many Americans. People rely on cars to commute to work, run errands, and get to wherever they need to be, when they need to be there. Cars range widely in terms of costs and features. It is important to ask questions of a seller and yourself when buying a car to get one that meets your needs and doesn't come with any surprise costs or drawbacks. What is the Car's History? A seller should be able to tell you the history of a car and why they are selling the car. This question does not...

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Cheapest Way to Lease a Car

Leasing itself is usually cheaper than a finance, depending on the money you put down and how long you plan to lease for. While various leasing provisions are available for an interested lessee, choosing some options over others, such as term, amount down and mileage, will lower your payment. Term If you check manufacturers' websites to view leasing advertisements, you'll notice that most leases run for a period or 36 or 39 months. While some people have different needs that leasing can provide for, such as an increased yearly mileage or...

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What Happens If I Leave an Auto Loan Defaulted?

If you aren't paying your auto loan provider, expect your lender to repossess your car. Once your vehicle is seized by your lender, you may pay to get it back or allow your lender to sell it. If the lender's sale amount does not warrant enough money to satisfy your loan amount, you must pay the balance due. If you still do not pay, your lender may sue you. Defaulted Car Payments If you miss a car payment, your auto loan provider will try to contact you by mail and phone. If you do not respond to its correspondence, expect your lender to...

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Is Insurance on Leased Cars the Same As on Owned?

If you own your vehicle outright, you can insure it as you please. Otherwise, financing and leasing insurance requirements are very similar. During the term of your contract, full-coverage insurance, or a collision policy, is required. Lenders can also require deductible limitations and higher limits than those required by your state. Purpose of Collision Coverage A collision policy includes liability and comprehensive coverage. The liability portion pays for damages you cause to other people or property. Comprehensive coverage includes...

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Is There Any Disadvantage of Putting Your Car Insurance Under Your Parent's Name?

Getting your first new car is an exciting experience, but you must tame your emotions a bit to ensure that you can get the car properly registered and insured. If you're a young person, it is tempting to simply choose to put your car on your parents' policy, but first understand any potential disadvantages of this arrangement. Insurance Requirements When you first purchase a vehicle, you must provide proof of insurance in the majority of states. A car insurance policy protects you, other people, your vehicle and the property of others....

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The Regulations for Buying a Vehicle in Pennsylvania

Buying a vehicle in Pennsylvania requires several important steps. Each component of the buying process is in place to help ensure that vehicles are sold to only those legally able to operate a motor vehicle. A dealership that does not adhere to these buying requirements risks losing its license to buy and sell vehicles in the state. The Pennsylvania Department of Transportation oversees vehicle buying regulations. Driver's License and Insurance In order to legally purchase an automobile in Pennsylvania, you must have a valid, state-issued...

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Is Ending a Vehicle Lease Early Possible?

It is possible to end your vehicle lease early. While some options may not be the most favorable to you, you can end your lease and avoid having to pay any excess charges, or at least purchase or lease a new car again. There are even ways to get out of your lease early without penalty. Lease-End Options You can terminate your lease early if you pay every payment due, in addition to bank-determined penalty fees, which you can find out more about by contacting your bank. You can find out the purchase price of your car and sell it or trade...

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Trouble Financing a Car

When you have poor credit, financing a car can be a challenge, and coming up with the money you need may take some work on your part. While auto financing may not be easy for you, you may still find some options out there to help you buy the car you want. Secure the Loan First If you have poor credit, you may want to focus on securing the auto loan before you actually shop for your car. Many people mistakenly think that you have to pick out the car and then take whatever financing is offered by the dealer. That, however, is not the case....

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What Happens When a Vendor Places a Lien on Your Vehicle in Houston, Texas?

In Houston, a vendor lien on your vehicle's title represents a third-party financial security in your vehicle until the vendor's charges are paid. Similar to a bank or credit union lien, the vendor lien will only be taken off your vehicle's title when the vendor's outstanding balance is paid off, which will release the lien solely into your name. Co-Ownership of the Vehicle The vendor that places a lien on your vehicle is a partial owner...

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What Are the Purposes of Refinancing Automobiles?

The term refinancing is often associated with mortgage loans. But if you finance a car through a bank, you can qualify for an automobile refinancing. But before talking with a lender, it's important to understand the reasons for refinancing and the potential consequences. Definition of Auto Refinancing Refinancing a car loan requires speaking with a bank or credit union and then completing an application for a new car loan. The new car loan replaces the original auto loan. The new lender pays off the old debt, and you begin making payments...

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How to Trade in an Auto Lease

The process of trading an auto lease is similar to trading a financed vehicle. You can purchase your leased vehicle at any time, usually for its lease-end value in addition to any monthly payments left in your contract. Because a leased vehicle's purchase price should equal its value near the end of the term, you may owe more than the vehicle is worth. If the lease buyout is less than the vehicle's value, you can use the equity to put toward your new loan. Instructions 1 Go to a dealership you want to purchase from. To find a dealer in your...

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Advantages & Disadvantages of Paying Cash for a Car

The main appeal of paying cash for a car is that you avoid accumulating additional debt. Nonetheless, there are times when carrying debt may be a better option for people who want to buy a home, bolster their credit rating or build an emergency fund. Financial Benefits You own your vehicle outright when you pay cash for it. You wont be subjected to the threat of a bad credit rating or a repossession due to falling behind on car payments made...

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What Does It Mean When You Co-Sign for a Car Loan?

Co-signing an auto loan involves assuming full responsibility for another person's loan. The arrangement comes with financial risks, and it could damage the co-signer's credit rating. The main difference between co-signing an auto loan and taking out your own auto loan is that you won't have any rights to the vehicle that the loan buys. Function You become a guarantor if you co-sign an auto loan, which means you guarantee repayment of the loan if the borrower doesn't repay it. If necessary, the auto lender can sue you to collect the unpaid...

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How to Buy Another Car When Your Car Is Repossessed

Most people need reliable transportation to go to work and take care of personal affairs. But if you recently lost your vehicle to repossession, you may have to rely on public transportation or other people to get around. A repossession stays on your credit report for seven years and lowers your FICO credit score. A low credit score can limit your financing options. However, several techniques can help you acquire another car after losing your vehicle to repossession. Instructions 1 Pay cash and avoid a car payment. Check local used car...

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