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USED CAR LOANS...EVERYTHING YOU NEED TO KNOW.
American Pride Automotive • June 21, 2013
This week we’re recycling a blog post that’s an oldie but a goodie! People come to us all the time with the same and similar questions about used car loan financing. Are you looking to take out a loan for a used car and not sure where to start? You aren’t alone. Here’s a primer on the smart way to get a loan for a used vehicle. When you’re ready, come to the American Pride lot and we’ll get you into a car you want for the right price! Until then, check out our inventory, updated in real time.
“Most people end up needing a loan to buy a car at some point in their lives, and as with all things that are based on credit the terms of the loan are dependent on your credit. Unfortunately the car business has a bad reputation for a reason and there’s often more going on behind the financing scenes that customers are aware of that can cost them hundreds or even thousands of dollars over the course of a loan.
As we’ve written about here before, the “Buy Here, Pay Here” types of car dealers usually serve those with poor credit. At these dealerships they “are the bank,” which allows them give loans to those with low credit scores (300-550). But because they are the bank, even if someone pays back their entire loan on time, it is not reported to the credit bureaus so the individuals’ credit score remains low.
But even loans on used vehicles from franchise dealers (Toyota, Honda, Ford, etc) can come with some huge hidden costs. Many large dealers have in-house banks that sometimes report to credit agencies, and sometimes don’t. It’s also in their best interest to charge the highest possible interest rate, even if that person would be eligible for a much better loan at a regular bank or credit union.
Here’s a good example on a $6000 car loan:
30 month term with a 30% interest rate=$286 monthly payment, and $2598 in interest paid over the life of the loan.
With an 8% interest rate=$221 monthly payment, and $639 in interest paid over the life of the loan.
Here at American Pride we are not the bank, so we look for the best possible option for each customer. For a few, we have no option other than BHPH (we have a BHPH partner for these cases), but we are frequently able to finance people with fairly low credit through the credit unions we have relationships with. We have been able to get people loans in the 8-10% range who were told elsewhere that their credit was so bad they could only get a loan at 25% interest!
When car shopping here’s what you need to know:
Your financial position-what’s your credit score, monthly income, how much can you put down?
Where the dealers’ interest lies based on your financial position-are you a highly desirable customer, or are you someone they see as a potential windfall?
Go to your bank or credit union first, and find out how much they’ll pre-approve you for, this gives you a great basis for comparing loans that dealers offer you. And if you have questions feel free to call Gerald or Josh, they know the business inside and out and are happy to talk about their experiences!”
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You’re driving home at night and it is raining cats and dogs. You can’t see but 20 feet in front of your car, but you’ve slowed down and are being extra cautious, so what could go wrong? Then you feel it. A sinking Cl-clunk. Maybe that “puddle” you saw ahead of you was deeper than just a puddle. Before you know it, your car is stalling in the high water in the middle of the road. Now what? First off, don’t panic. Turn on your hazards and crank the ignition once. If the car starts, make it dry land and pull over to assess the damage. If it does not start the first time, do not try to start it again. Doing so can result in a hydro locked engine and will likely necessitate the rebuilding or replacement of the engine. Unfortunately, if you find yourself stalling in water at all, your vehicle will probably need costly repairs. The best way to avoid water damage is to practice safe and smart driving in wet weather, which brings us to Part 2 of the Everything Auto “Blame it on the Rain” series (Find Part 1 here). Take heed of these severe weather driving tips: 1. TAKE NO CHANCES ON PUDDLES Even if the standing water ahead of you looks shallow enough to drive through, think twice. If the water is “rushing” or if other drivers are making a point to avoid it, don’t assume that your vehicle is the exception. Additionally, you never know the hazards that lay at the bottom of a puddle. Hidden potholes or debris can pierce your tires and jostle your alignment and suspension system. 2. IF YOU MUST TAKE A CHANCE, TAKE IT SLOW AND STEADY When you deem it necessary and safe to drive through water of questionable depth, go slowly. Speeding through a puddle, even a shallow one, can splash water into your vehicle’s intake and critically harm the engine. Like we mentioned last week, after driving through standing water, lightly tap your brakes to make sure they aren’t saturated and to dry them off. 3. KEEP A ROADSIDE EMERGENCY KIT HANDY Sometimes, no matter how careful you are on the road, accidents and vehicle malfunctions happen, especially in wet severe weather. That’s why it is extremely important to keep emergency supplies ready in the trunk for the worst case scenario. You can buy a preassembled one, but it is cheaper (and more rewarding) to assemble your own. What should you include? Edmunds.com provides an excellent comprehensive list of items, a few of which include: 12-foot jumper cables Four 15 minute road flares Two quarts of oil A gallon of antifreeze A first-aid kit. Find the rest of the list here We hope that this series has given you helpful safety insights and tips for driving in the rain! Remember that American Pride Automotive is always here to help and ready to answer any and all of your auto repair and maintenance questions! Call or contact us today.
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