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YOU HAVE TO DO YOUR HOME FIRST TO GET A GREAT AUTO LOAN!
In the Internet age, finding new-car data to use as haggling ammo is easy. But many buyers who spend days whittling the sticker price let down their guard and hand the savings back when they accept a dealer's car-loan rate. It's easy to see why. The rate you get depends on information that's not always easy to come by. Plus, dealers put their most talented closers in the financing-and-insurance office, where you are subjected to a rash of offers for extended warranties and other add-ons as well as a blizzard of paperwork that can exhaust you into submission. Dealers have also been known to bump the rate above what you should pay based on your credit history. If you qualify for a 6.5% rate but the dealer charges 8% on a 60-month, $20,000 car loan, you pay $900 more in interest. That's extra profit for the dealer. The interest rate you pay depends on the credit "tier" you fall into. Tier A and sometimes tier B borrowers get the best rates; E borrowers pay up to 30% interest. On five-year loans, A-credit customers shopping for a new vehicle could recently command rates of 6% to 7%, or as low as 0% on vehicles sporting low-rate incentives
The tier you fall into depends mostly on your credit score, so the first thing you should do is research that number. You can get a free credit report once a year from each of the big-three credit bureaus at www.annualcreditreport.com, but you usually have to pay $6 or so to get your credit score. FICO scores, the most popular flavor, range from 300 to 850. About half of all car buyers who finance a vehicle have a score above 720 (tier A), according to a study by the Consumer Banker's Association. Another 25% beat 680 (tier B). If you have a borderline score, you could be boosted into a higher tier if you make a sizable down payment or shorten the loan term. In the U.S., the average down payment for a car is $2,400, the average amount financed is $24,864, and the average monthly payment is $479, according to Edmunds.com. The most popular loan term is now a payment-stretching six years. If you're "upside down" on your old car loan (you still owe money on it after the trade-in), it's no longer a deal breaker. In these days of easy credit, lenders will roll the old balance into the new. Nor are down payments de rigueur; you can finance up to 100% of the manufacturer's suggested retail price plus taxes, tags and fees. A few simple strategies will prevent you from being fleeced in the dealer's finance office. Your best bet is to have a good loan rate in the bag before you even set foot on the car lot. First, find out the annual percentage rate you qualify for, and then get pre-qualified for a loan from your bank, your credit union or an online lender, such as E-Loan or Capital One Auto Finance. If the dealership can't beat the rate, politely decline its loan.
A corollary is to keep all transactions -- price of the car, value of the trade-in and financing -- separate. If you let the dealer merge them, it's tough to know if you're getting the best deal on each one. And a dealer who knows how much you'd like your monthly payment to be can play with the price, options, trade-in value and interest rate to come up with what you budgeted -- often by extending the loan term. See Wheeling and Dealing to learn more about how to negotiate your deal.
Should you take a low-rate-financing incentive instead of a cash rebate? Zero percent is hard to beat, but if your loan rate is low, say 4.9%, the decision is tougher. One rule of thumb is to take the cash if you plan to keep the vehicle less than three years. But run the numbers on an Internet calculator such as the one at kiplinger.com/links/carincentive.
Writing a check from your deductible home-equity line of credit isn't always a good strategy now that average interest rates are about 8.8%. It's probably better to keep the home-equity funds intact for a home-remodeling project or financial emergency.
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This is one of my favorite images
This is my good friend Hal. I took this picture on his birthday. I think he likes to be in pictures. |
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Most Expensive Autos to Insure !
The Ford F-series pickup, which consistently ranks as America's most popular vehicle, is also the most expensive to insure among the top 20, according to a report released today by the insurance web site Insure.com. The Chrysler Town & Country minivan is the least expensive to insure of the 20 most popular vehicles, while its corporate twin, the Dodge Caravan, is the third least expensive. The Chevrolet Cobalt small car is the second least expensive to insure, according to the report.
Any individual's actual car insurance premiums can vary greatly depending on factors such as their age, driving record and where they live. But the vehicle itself is a major factor that insurance companies consider to determine premiums.
Insurance is the third largest cost of owning a new car, after depreciation and fuel, according to Insure.com. Insurance premium costs, now averaging almost $900 per year, have risen 27 percent since 2000, according to the report.
Insure.com looked only at the 20 top-selling vehicles in the United States.
In order to rank the vehicles by their relative costs to insure, Insure.com compared rates provided by the web site Esurance.com for a 45-year-old single male with no traffic violations who drives less than three miles to work. The amounts of coverage were also the same for each vehicle. Premiums for three different cities, one on the East Coast, one on the West Coast and one in the Midwest, were averaged for each vehicle.
Factors such as popularity with car thieves, how much the vehicle costs to repair after a crash and the amount of damage it does to another vehicle in a crash can influence a vehicle's cost to insure, said Loretta Worters, vice president of the Insurance Information Institute. Options, such as a bigger engine or a high-performance trim level, can make one vehicle cost more than another even if they are the same make and model, said Worters. For example, a Honda Civic Si, the high-performance version of that car, might cost more to insure than the Honda Civic Hybrid.
Some vehicles are also more prone to having parts stolen, such as headlights or spoilers, Worters said.
Before deciding on a car to purchase, Worters recommends that shoppers contact their insurance agent with a list of the vehicles being considered.
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Top 20 most popular cars ranked by relative cost to insure !
Least expensive vehicle to insure is listed first.
1. Chrysler Town & Country
2. Chevrolet Cobalt
3. Dodge Caravan
4. Chevrolet Impala
5. Ford Taurus
6. Ford Econoline van
7. Jeep Grand Cherokee
8. Chevrolet Malibu
9. GMC Sierra pickup
10. Toyota Corolla
11. Ford Focus
12. Nissan Altima
13. Chevrolet Trailblazer
14. Honda Accord
15. Toyota Camry
16. Chevrolet Silverado pickup
17. Honda Civic
18. Ford Explorer
19. Dodge Ram pickup
20. Ford F-series pickup
AMERICAN TOTAL CAR CARE !
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This is one of my favorite images
This is my good friend Hal. I took this picture on his birthday. I think he likes to be in pictures. |
This is one of my favorite images
This is my good friend Hal. I took this picture on his birthday. I think he likes to be in pictures. |
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