How to Assume Car Payments in Florida

The process for assuming car payments for another person mirrors the process for purchasing a used car and financing the balance of the cost. In Florida, the private seller is not bound by law to disclose the same Buyer's Guide required of car dealerships, nor are they obligated to provide any implied warranties. Buyers who seek an assumption of payments will need to do their own research on the vehicle and secure an independent inspection and warranty prior to purchasing the vehicle.

Instructions

1

Contact the financial institution financing the car to determine the remaining balance owed by the current owner.

2

Choose a bank or financing company to finance the balance owed. Provide the pertinent information about the car to the prospective lender. The information should include the make and model of the car as well as the mileage and condition of the car. The vehicle identification number will be sufficient in identifying the vehicle make and model. You will have to record and submit the condition and mileage of the vehicle.

3

Apply for an auto finance loan from the financial institution you have chosen. Disclose your income, other debt and Social Security number to obtain a credit history report for review by the bank or lender. You will also be required to furnish evidence of your financial stability. Stability is expressed by the time you have been employed by your current employer and length of time you have resided in your home or apartment.

4

Choose among the terms available for the loan amount, including monthly payments, payment options such as automatic electronic transfer and length of the payment in number of months. Approval will be determined by your credit worthiness and ability to pay, as will the available terms including interest rates available.

5

Purchase a vehicle history report to review any past accidents and other maintenance issues related to the car you are purchasing. The seller is not bound by Florida law to furnish the report or a Buyer's Guide before selling the vehicle to you according to the Office of the Florida Attorney General.

6

Secure any relative warranties on the car in writing as the individual for whom you are assuming payments is not obligated by Florida law to provide you with any such guarantee.

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How Much Does a Vehicle Depreciate Annually?

Purchasing a new car is one of the biggest financial steps that the average person takes in a lifetime. While purchasing a car is a big financial investment, it does not improve your financial situation in the long run. The vast majority of vehicles actually depreciate in value over their life. Vehicles do not all depreciate at the same rate, but in most cases, you can be sure that your car is losing value.

First Year Problems

One of the biggest disadvantages of buying a new car is that it depreciates rapidly in the first year. When you buy a new car, it typically depreciates the most of any year during the first year that you own it. According to The Motley Fool, new vehicles depreciate an average of more than 20 percent during their first year. Typically, as soon as you drive it off the lot, it loses a big portion of its value.

Rule of Thumb

While every car is different, plan on most vehicles depreciating at about the same rate each year. According to Bankrate.com, the average car depreciates about 15 to 20 percent every year. This means that in the second year of ownership, it will be worth about 15 percent less than what it was worth at the end of year one. With a depreciation rate like this, it is no wonder that so many people end up owing more than their cars are worth at some point.

Protecting Against Depreciation

When you buy a new car, to protect yourself against this depreciation. Otherwise, if you are in auto accident, you could end up owing money on a vehicle that you cannot drive anymore. Your auto insurance company is only obligated to pay what the value of the car is at the time of the wreck. If you owe more than that, the insurance company will not pay it. To protect against this risk, you may want to purchase a gap insurance policy. This type of insurance pays the difference between what you owe and what the auto insurance company pays if you total your car.

Buying Used

Because of the high rate of depreciation of new vehicles, many people choose to buy used cars. Since the highest percentage of depreciation occurs during the first year of ownership, savvy buyers typically buy a used car that is one to two years old. This way, they can take advantage of the new car features without having to fall victim to the rapid depreciation occurs in the first few years of ownership.

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When Does Leasing a Car Make Sense?

If you don't have the money to purchase a car outright, then you have two options: leasing or applying for an auto loan. Auto loans are popular because at the end of the loan, you own the car. A lease essentially allows you to borrow the car for a certain amount of time, so you never actually own the vehicle. Ownership aside, there are a few major benefits to leasing a vehicle.

No Down Payment

A typical down payment for a new car is usually 20 percent, and that can mean $3,000 or more out of your pocket. As long as your credit score is good, which is typically a score above 620, leasing a car usually doesn't require a down payment, although you can still elect to do so if you want lower monthly payments. If you have poor credit, the finance company may require you to put something down. The amount depends on how poor your credit is.

Lower Monthly Payments

If you want lower monthly payments, then leasing a car is definitely the way to go. You only pay the depreciation cost plus interest, whereas you pay the entire price of the car plus interest when you buy a car. For example, if you lease a $25,000 car for 36 months, and the estimated resale value is $12,000 after 36 months, then you will only pay the depreciation cost of $13,000 plus interest. If you bought a car for the same price, you are responsible for the entire $25,000 plus any interest owed.

Driving a New Car

Leasing allows you to drive a new car every two to three years, depending on how long your lease term is for. If your lease is for 36 months, you turn the car back into the dealership at the end of 36 months and you can lease a new car. If you often get tired of your vehicle after a few years and enjoy new technology and features, then leasing a car is the way to go.

Miles Driven Per Year

Most lease agreements stipulate that you are only allowed to drive a certain number of miles per year, typically 12,000 to 15,000. If you go over your allotted number of miles, you must pay additional money that's determined by your lease agreement. Some leases do not have a miles restriction, but most do. If you drive long distances every week, then you can often work something out with the finance company to allow for more miles per year, although you'll pay more per month.

Downside

The downside to leasing a car is that you never actually own the car. Long-term leasing is always more expensive than buying a car outright. For example, if you lease two cars for the $25,000 each, you're going to pay more in the end than if you bought a car for $25,000.

Tips

The ideal length to lease a car is 36 months, according to Edmunds.com. Most warranties last 36 months, and during that time you typically won't have to fork up too much money for repairs and maintenance, only the occasional oil change and tire rotation. If you lease a used car, then you're typically going to have to put more money into repairs and maintenance than if you lease a new car.

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How to Negotiate Buying Your Leased Vehicle

With most vehicle leases you have the option to buy the vehicle at the end of the lease period. This is called a "lease payoff" and just means that you have the option to purchase the vehicle from the leasing company. If you choose to purchase the vehicle, this benefits the lease company because they don't have to worry about finding something to do with the vehicle after you return it. For this reason, many lease companies are willing to negotiate the terms of the lease payoff at the end of the lease period.

Instructions

1

Check the residual value of your vehicle in the lease contract. Compare this value to the values published in automotive price guides like Edmunds, Kelley Blue Book and the NADA guide. Note that if the residual price is equal to or lower than the published value of your vehicle, you will not likely be able to negotiate a lower price; however, purchasing the car may be in your interest even without negotiation if this is the case.

2

Call the leasing company and speak to a representative about lease-end options. Ask for the buyout price for the vehicle. Note that this might be slightly different than the residual value of the car because your security deposit and other fees may be deducted. Ensure you are talking to someone with the authority to modify the buyout price before you attempt to negotiate a lower price.

3

Understand that the leasing company will either be forced to sell your vehicle as used or accept a wholesale price at auction if you choose not to buy the car. Choose a starting point for negotiation that is well below the residual value but still realistic. Make your offer to the leasing company and wait for a counter offer. Know that if you don't receive any response to your offer, your leasing company may not negotiate buyout prices.

4

Avoid telling the leasing company about any problems with the car. Remember that if the company thinks you are buying the car because it is damaged or you have exceeded the mileage limit they will be less willing to negotiate a lower price.

5

Negotiate with the company for as long as necessary until you arrive at a fair price for the vehicle. Understand that you may have to extend your lease for a month or two if negotiations take an extended amount of time; you can expect to spend at least a few weeks in negotiations before arriving at a price to which both you and the company can agree.

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How to Find a Car With Bad Credit Problems

So, you are interested in purchasing a car, but your credit is not too good. Well, even though you've experienced some credit problems, you may still be able to find a car. In fact, many people have dealt with bad credit at some point in their life--so you are definitely not alone. Fortunately, there are resources that you can use to help you find a good car.

Instructions

1

Speak with a loan specialist at your bank. If you are currently employed and have a checking or savings account in good standing, then your bank or credit union may approve you for a car loan. Please note that you may be required to meet other requirements before your bank approves you for a loan and you may also need collateral in order to secure your loan.

2

Search for a car on the Internet. There are a variety of companies and lenders that offer special car-loan financing for people with bad credit. So, even if you have late payments, judgments, bankruptcy or a repossession in your credit history, you may still qualify for a loan through a special financing lender.

3

Locate an in-house financing dealership in your area. Some car dealerships offer in-house or buy-here, pay-here financing programs for those with bad credit. With in-house financing, the car dealership is the lender who collects your monthly payments--rather than a financial institution. Fortunately, these types of car lots normally do not perform a credit check on applicants.

4

Find an appropriate co-signer. Consider asking a family member or friend to serve as a co-signer on your application. Quite often, lenders will approve someone with bad credit if the person has an appropriate co-signer listed on the application--someone who has an acceptable credit score and income.

5

Pay cash for a car. If you have a sufficient amount of money in your savings account, perhaps you should consider paying cash for a car. Many car dealerships have cash cars for sale--or you can purchase a car at an auction or simply browse through the classified section of your local newspaper to find a car.

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How to Combine Two Car Payments Into One

If you have two household cars with two separate monthly payments, you may be able to combine those two car payments into one. Combining two car payments into one not only serves to eliminate a bill that you must remember to pay each month, but sometimes gives you the opportunity to change the terms of the loans. By refinancing two car payments into one loan with a lower interest rate, you lower your total monthly payment.

Instructions

1

Try to refinance the two car loans into one with the lender who issued the loans. While refinancing two cars into one loan is not a common practice with lenders, according to Wells Fargo it can be a possibility. Generally, since the vehicles serve as collateral in auto loans, in order to refinance two cars into one payment with a lender, the remaining amounts of the loans for both car loans must be less than the total worth of one of the vehicles, so that the one vehicle can still serve as collateral on the loan.

2

Get a home equity line of credit if you own your own home. The most common method used to refinance a car payment, according to Interest.com, a home equity line can be used to pay off any living expenses, including car loans. Once you pay off the car loans with your home equity line of credit, the car payments roll into the home equity payment, giving you only one monthly payment.

3

Take out a personal loan. Personal loans can be difficult to come by, especially if the economy is weak, but, if you can get one, you can use it to pay off both of the cars and have only the one loan payment to pay each month. A lender is more likely to give you a personal loan if you have collateral that you can put up for the loan, such as another paid-off vehicle or property.

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How to Finance Buying a Car With Banks

Several different financing options may be available to you depending on your credit standing and income. Manufacturers often offer incentives to buy, such as low-rate financing or lease options. You may also finance your car at a credit union, which may offer lower interest rates than a bank. Once you decide where to apply for your loan, you must fill out a credit application and submit your vehicle information for an approval. Based on the information you submit, your lender will approve or decline your loan.

Instructions

1

Check auto loan interest rates. Go to bank and credit union websites to view the rate and lending terms, which may differ by new or used car purchases. If purchasing a new car, visit the manufacturer's website or ask your dealership for its new car interest rates, which are often lower than traditional lenders offer.

2

Call any potential lenders to discuss your loan options, or discuss options with a salesperson if using a dealership. Be sure to discuss your target monthly payment and how you plan to handle tax and fees, which you may roll into your loan or offer as a down payment.

3

Complete your loan application, whether online, on the phone or in person. Have your information ready, including your date of birth, Social Security number, employer address and phone number, an accurate estimate of your time at your job and at your address, and your gross annual income.

4

Submit your vehicle information. Have the following information ready: vehicle identification number (VIN), year, make, model and car features. Features include vehicle options such as a sunroof, DVD system, alloy wheels or a sunroof, which increase vehicle lending value. Also include the amount of the loan you want.

5

Wait for your approval. You may receive it instantly or it may take up to one week depending on where you apply. Once approved, confirm the terms of your loan with your lender.

6

Add the vehicle to your insurance policy, insuring the car with a full-coverage policy. Ask your lender for its requirements and add any limits it requires. Obtain proof of insurance coverage with your lender listed as the policy's loss-payee and submit it to your lender.

7

Sign your loan contracts. Go over the contract to ensure the terms are as you previously discussed. Obtain your loan check to provide to the vehicle's seller. Keep copies of all of you loan paperwork in a safe place for future reference.

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