Monday, August 21, 2017

7 Best Car Financing Tips

Buying a new or used car? An automobile is undoubtedly one of the largest purchases you will make this year. Unless you are prepared to fork out 100% of the cash needed for the purchase, you are going to need to navigate the world of car financing.

And when it comes to buying a car, financing is no insignificant detail: the choices you make now about your loan’s interest rate, how long you will take to repay your loan, and the amount of your down payment will play a big part in your financial future for the length of the loan and beyond.

Before you buy a car, check out these 7 best car financing tips:

1. Check the newspaper or online for the best advertised interest rates: As the economy goes through its natural cycles in terms of the availability and cost of borrowing money, interest rates go through their own cycles as well. A great way to gauge the current interest rate climate is to check the newspaper or auto dealer websites for their current best deals. You can rest assured that the advertised deals are their best, since those ads work to get people in the door. For example, if you see some 0% interest rate deals being advertised, you now know the best-case scenario for when you approach a dealership.

2. Decide how much cash you can put down: The amount of your monthly payments, as well as the total interest you pay over the life of an auto loan, depend on the payback period of your loan and the amount you are willing to put down in cash. Obviously, the more you can afford to put down in cash for your car now, the less you will have to borrow. Be sure to put down as much as possible, but of course leave yourself a “padding” of money for a rainy day.

3. Get pre-approved for a loan before visiting the dealership: Once you walk onto the lot of an auto dealership, you are much more likely to buy a car from them than otherwise. And, the dealership personnel know this. A great way to keep your options open in terms of getting the best car financing is to go to your local credit union or bank and get pre-approved for an auto loan before heading to the dealership. That way, when talking to the dealership you will have in the back of your mind a next-best option in case you can’t get the financing deal you want through them.

4. Negotiate your auto price with financing in mind: Remember that the entire dealership works as a team. If you negotiate an exceptionally low price on the car with the salesperson, chances are that the finance department will try to get you into a more expensive financing deal. Are they crooks? Not likely. Rather, just like anyone else, they are trying to turn a profit.

5. Never accept the first financing offer: Once you have agreed upon a price of your new car and you are sitting down with the financing person to discuss loan terms, let him or her make the first financing offer. No matter how reasonable it seems, make sure to reject the first offer he or she presents to you. Remember, they can always do better. Ask for better terms and you will likely get what you ask for.

6. Choose the shortest payback period possible: Opting for a longer payback period of say 6 or 7 years may seem attractive, given the much lower monthly payments. But, remember that in doing so you will be paying a small fortune in interest over the life of the loan. Not only that, but you may get tired of your car and want a new one before the next 7 years go by. All the more reason to agree to a 3 or 4-year loan, if you can swing the payments.

7. Remember that you can always walk away before signing: While at the dealership, always keep this in mind: you always have a lot of other options. Sure, some of them may require a bit farther of a drive to get to, but you should never feel obligated to buy from the first dealership you contact. Just knowing that you have other options will take the pressure off, helping you avoid agreeing to a financing deal that you are not comfortable with.

Keep your eyes open and ears perked during the entire car financing negotiation process. Do not let your guard down until you drive off the lot with your car. And remember: you can always decide to try your luck somewhere else.

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Understanding How Prepaid Cards Work

Linda Sherry with Consumer Action provides an overview of exactly how reloadable prepaid
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Second Mortgage: How Do You Even Qualify?

When you think about a second mortgage, what do you think of first? Which aspects of a second mortgage are important, which are essential, and which ones can you take or leave? You be the judge.

Great news! You qualify for a second mortgage. Now what would you like to do with the second mortgage? It will be your answer to this question that determines whether or not your second mortgage is your friend, or your foe. That seems to be an awfully strange way to look in a second mortgage; however that’s exactly what the mortgage will be. Your friend or your foe.

How do you even qualify for a second mortgage, what is a second mortgage, and why would you want a second mortgage? Well, the answers here are as varied as the consumers who apply for such mortgages. Many times consumers need a second mortgage to make improvements on their home. Many times consumers need a second mortgage to put their child to college. And sometimes, consumers need a second mortgage to start a business. The reasons given here for obtaining a second mortgage increase the value of the home, provide opportunity as an investment in your child’s future, or provide the opportunity to increase income. These are the original and most beneficial reasons for obtaining a second mortgage.

Are they the only reasons consumers obtain second mortgages? No. Today’s market has been a great influx of second mortgages to pay off credit card debt, to buy new car, or to simply take a vacation. Should consumers receive a second mortgage for those reasons? Absolutely. Should consumers actually ask for a second mortgage for those reasons? Absolutely not.

If you find yourself confused by what you’ve read to this point, don’t despair. Everything should be crystal clear by the time you finish.

An educated consumer understands the consequence of a second mortgage. The educated consumer understands the price of the second mortgage. What is the price of the second mortgage? The equity in your home. When you apply for a second mortgage, you’re trading the equity in your home for cash. You’re giving up your savings.

If you’re trading your savings, in order take a step up, you’ve made the right decision. If you’re trading your savings for a frivolous expense, you’ve made the wrong decision. That’s how you determine if your second mortgage is your friend or your foe.

Today’s consumer is acquiring second mortgages that for many will prove to be their foe. They’re not increasing the value of the home; they’re not educating their children. Nor are they increasing their income earning potential, they’re simply spending their savings. Rising real estate prices, increasing availability of mortgage products, and the decline of savings for the public as a whole is creating the “bubble” effect. The bubble effect occurs when prices rise, spending rises, at a rate greater than can be supported on a long-term basis. At some point, the bubble bursts.

Your second mortgage, if used to increase the value of your home, will have insulated you against the drop in price. Your home is actually worth more; therefore, if prices drop you’re protected. This was the original intent of the second mortgage; to provide the consumer with easy access to the savings accumulated in their home for home improvements, emergency events, or in order to better their homes or lives. You know for the most part consumers do not save money in a savings account; consumers only save money when they aren’t aware that they’re saving money. Home equity was one of the last hidden ways consumers were saving. Second mortgages and other loan mortgage products have managed to eliminate those savings as well. Has the consumer stop to contemplate the consequence of negative saving? Absolutely not, and our current system of mortgage lending encourages negative savings.

There’s a lot to understand about a second mortgage. We were able to provide you with some of the facts above, but there is still plenty more to read about in in our article directory.

Hans Hasselfors is the founder of You may find varied second mortgage articles in our article directory.

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Different Models Of Car Finance Options Available To Customers

It is quite normal for the people to buy the cars on finance. The cars price is not paid upfront in full in the normal practice. People take recourse to the financing options available to them so that they are not troubled to take the so much money out from their pockets in one go. Rather, they opt for taking a car loan and paying monthly instalments to the finance companies. This car finance arrangement is beneficial for the car makers, car users and even the finance companies. Car makers have more sales, car users fulfil their aspirations and the finance companies act as a crucial bridge between the supplier and end-consumer earning commissions.

If you are looking to have a car of your own choice, you can fulfil your wish without hurting your pocket or making out-of-turn expenses. The car finance companies have different models of working. You can select the one which suits you the best-for personal use cars or for business cars. Here are some of the common models of engagement:

1. Car Lease: In this model, the financer will purchase the car and hold the title to it. It will give the car to the customer for a monthly lease. When the residual life of the car is over, it can be sold at an auction. If the price received at auction is less than the one determined by the official regulator, then the customer shall make good the loss to the finance company. The rationale behind this is simple, that the financer did not want the car for his own use and was a way to facilitate the customer to drive in his sown car. So, there is no reason for him to sustain losses.

2. Hire Purchase arrangement: In hire purchase arrangement, the title of the car is drawn in customer’s name only after he has paid the full amount of instalments and all the instalments. The car finance company holds the ownership or title in this case as well but the open of auction is not open.

3. Chattel Mortgage: In this model of car loan arrangement, the financer does not hold the title to the car. Rather, it is the customer who has the ownership of the car with him from the very beginning. The finance companies do, however, have a charge on the asset because they have provided the loan to the customer for purchasing the car.

4. Packaging the car with the salary of the employee: Many companies have this arrangement called the Novated Car lease arrangement. In this, the employee chooses the car and the employer pays for the car instalment from the salary account of the employee. If the employee leaves, the car and its obligations go with the employee and are passed on the next employer, if he or she so desires.
Due to the different natures of these arrangements, it is important that the customer inquires about the incidence of taxation (sales tax, income tax, etc) and the quantum of the same before opting for any one of these car finance options.

Madison Finance is the provider of different types of car finance options to the customers. It allows you to compare the car lease choices provided by various car loan providers.

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