Is 0% Financing Too Good to Be True? 2015 Latest

 Is 0% Financing Too Good to Be True? 2015 Latest

Because many auto dealers are offering 0% financing, you may be confused and wondering if this rate is too good to be true? Unfortunately, in many cases the answer is yes.

Before we get into whether 0% interest is too good to be true, it’s important to understand what 0% financing actually is. When you get a car loan, as everyone knows you are borrowing money to pay for a car. The bank or credit union doesn’t give you that money for free. Instead, you have to pay interest, or a fee that you give the financial institution for lending you the money.

The phrase, “if it’s too good to be true, it probably is too good to be true,” is definitely something you should keep in mind as you search for a car loan. Many times the 0% is a “teaser rate” meant to get you in the door and may not apply to you or may not be the best deal for you.

The problem with 0% financing is that not every potential car buyer qualifies for this super-low financing. The too-good-to-be-true rate applies to people with very high credit scores, excellent credit records and little or no debt. That means only about 5% of the population qualifies for the 0% rate. And, if you do qualify you will most likely have larger payments over a shorter period of time, which may be difficult to fit into your monthly budget. Unless you fall into this category, you may get stuck paying a much higher rate.

You may be surprised to learn that even if you do qualify for 0% financing, it could cost you more in the long run. If the dealer offers you the choice of 0% or a cash rebate, taking the rebate and financing through your local credit union could save you money – even if their rate is higher. Let’s do the math:

Credit Union vs. Dealer Auto Loan

• Vehicle purchase price: $20,000

• Cash rebate instead of 0% financing: $ 3,000

• Amount financed: $17,000

• Interest rate: 2.49% APR or 0% with dealer

• Term of loan: 48 months

• Monthly payment: $372.46 – $416.67 with 0% financing

Total Saving/Life of Loan: $2,122.08

There are numerous reasons to get a credit union car loan. Below are just a few:

Credit Unions have the funds and healthy relationships with car dealers to make the loans.

You have a better chance of having your loan approved if you have credit problems.

Credit unions are non-profit organizations and work to provide members with high-quality customer service.

Members tend to have a more personable experience at a credit union so you can openly discuss your concerns about your loan, discuss flexible repayment options and review your financial situation.

Credit Unions are more likely than traditional banks to work with you if you experience difficulty making the payments because they are more in tune with their local communities.

You could get lower monthly payments with your credit union, because low auto loan rates are available for loans with longer terms as well as shorter ones.

You may save money on the total cost of the loan, because credit unions don’t charge application fees or prepayment penalties.

So, the next time you see a 0% rate, do your homework and get pre-approved at your local credit union before you even shop for the car of your dreams. An informed buyer is definitely the best buyer!!!

3 Things for A Successful First Car Loan 2015

 3 Things for A Successful First Car Loan 2015

The harder you work, the luckier you become.

Every first-time car buyer should keep these words close to his heart. Auto loan process is difficult for everyone. But, it becomes a harrowing experience for first-time buyers because of their ignorance and inexperience.

If you are in the auto financing market for the first time, do not worry. You need to take care of three important things because they will ensure a successful car buying process.

1. Cash

Days of barter are over; the era of cash is forever.

You cannot buy anything without cash. Even if you apply for a car loan, you will be required to make a down payment. So, it is important that you work-out your budget before buying a car.

You will need cash for the following things:

>> Down payment

>> Monthly payments

>> Insurance

>> Registration fees and taxes

>> Fuel

>> Maintenance

So, make sure that you are ready to assume the financial responsibility of a car before searching for one.

2. Credit score

After the days of report card, the days of credit report begin.

Just like colleges and universities check your SAT scores before approving your admission request; lenders check your credit score before approving your car loan application. Your credit score will determine your credit worthiness and help lenders in deciding the interest rate. Ninety percent of lenders opt for FICO score provided by any of the three credit bureaus: Equifax, TransUnion and Experian.

Every credit bureau gives different importance to credit score components. So, there are differences in each of your credit score. And, every lender has the right to use a credit score from any of the credit bureaus. So, it is important that you concentrate on your credit score range and not your exact credit score number.

If you have not obtained any type of credit before, you will not have any credit history. Following are the options for car buyers with zero credit score:

a. Obtain a no credit auto loan program for your first car.

b. Ask your parent to assume the responsibility of the loan.

c. Build your credit score by obtaining a secured credit card, department store card, etc.

3. Co-signer

Usually, a first-time car buyer has zero credit history. This creates a risky situation for lenders. They don’t know whether they can trust someone with no history of making regular payments. It is for this reason that lenders require someone with established credit history to co-sign you loan agreement.

Remember that a co-signer is different from a co-applicant. A co-signer has no right on the ownership of the car whereas as a co-applicant has equal right. You can ask your friends or parents to become a co-signer.

If you have trouble finding a co-signer, you can request the lender for approving your loan application without a co-signer. Although, no co-signer option should be considered as the last resort because it is expensive.

So, these are the three things that should be kept in mind before searching for your first car loan. Remember the words of Charles Buxton: “In life, as in chess, forethought wins.”

The Best Options for Your Caravan Finance 2015

 The Best Options for Your Caravan Finance 2015

Options for Your Caravan Finance

Buying a caravan can be a great way to organise more flexible holidays and weekend breaks. It can provide you with a home away from home, with all of your creature comforts. You can travel anywhere you would like to visit, spend one night or several without needing to worry about expensive hotel accommodation or costly restaurant bills. However, unless you are in a very fortunate financial position, it is likely that you will need to consider finance to fund the purchase.

Dealership Caravan Finance:

The most obvious place to look for your caravan finance is the dealership where you are purchasing the caravan. While this can be a great place to secure automotive finance, consumers should not assume that they are automatically obtaining the best auto finance rates. The dealership may have some attractive packages, but be sure to read the small print to check for any hidden fees or charges, and compare the rates with other providers before you commit. In many cases, the sticker price for the finance options are often based on longer term loans to make the monthly charges more attractive. Although this means that your monthly expenses will be less, you will be paying far more over the term of the loan. Always check the total finance cost in addition to the APR and monthly payment estimates.

Bank Loans:

Another source of financing is a loan from your high street bank. Most banks and financial institutions advertise some great loan deals for any purpose. However, you should be aware that since the global finance crisis, many banks are reluctant to lend to those without an excellent credit record. If you have less than perfect credit, you may not qualify for the advertised rate and will be offered a less competitive deal. Again, be sure to compare any quotes to check if it is the best possible deal.

Specialist Caravan Finance Broker:

A broker can be the best way to get a great deal on your caravan finance. Reputable brokers have access to a range of lenders who specialise in certain types of finance. The broker can search for the most competitive deals, allowing you to compare caravan finance rates without needing to fill out multiple forms and applications. A broker can assist you even if you have less than perfect credit as they will have access to a number of companies with more relaxed lending criteria. The broker can assist you with the paperwork, making the loan application process far less stressful and frustrating.

Finding caravan finance need not be stressful, but it can be a good idea to research your options before you commit to a purchase. This will allow you time to compare finance rates and find a great deal. You can then shop with confidence that you can comfortably afford your new purchase.

If you are considering caravan finance, Perth consumers should contact us. We specialise in all types of automotive finance and would be happy to discuss your requirements and assist you in obtaining the deal best suited to your particular circumstances.

Valuable Car Finance Tips 2015

The second largest investment you will have in a lifetime perhaps is getting your own car. After you have scrutinized every model and zeroed in on the best car to purchase, the next process is to determine how you are going to pay it.

The road to car ownership is paved with car finance options. The package you choose will make the difference between monthly struggles and easy payments. Will you get to keep driving your car or have to default on the loan over a certain period?

When looking at your financing options, here are valuable tips to consider:

Think about interest rates. Your interest rate will depend on a number of factors such as the type of the car, the length of the loan term, your credit rating and the lender. Generally new cars have much lower interest rates. Higher interest rate is required for longer car loans. You will get lower interest rates if you have been pretty good at keeping a good credit rating score. Focus on the interest rates as different companies provide varying options.

Choose from as many lenders as possible. Your options for car financing could be banking institutions, the automaker, credit unions, and other lending sources. Weigh the pros and cons of the different types of lenders. Going through all the interest rates and loan-terms of the different lenders will be overwhelming task. Experts not only help you make the right choice, but also offer you a number of good options. Consumers today get the right financing for their vehicles with finance consultants working exclusively on helping consumers.

Seek expert guidance. A financial consultant would point out key features you may want for your loan, allowing you to get a tailored approach, and therefore an ideal solution, to your financing. Such expert help would also come in handy for businesses looking to invest in company cars and employers who may want to offer a lease (also known as salary packaging) to high performing employees.

Ask for special deals. Special deals on certain loans are offered by some lenders in order to get fairly competitive in the market. Depending on the automaker you have chosen, you could be given zero-percent financing or offered lower rates for short-term lengths.

Companies are able to help employees on their car financing needs through a special form of lease. The lease is a three-way agreement between the employer, the employee and the finance company. As the employer though, be aware that while you should be able to finance a car after a bankruptcy, you may not be able to get the best car finance rates.

No Credit Auto Loan Offers Multiple Benefits 2015 to Young Car Buyers

 No Credit Auto Loan Offers Multiple Benefits 2015 to Young Car Buyers

The Birth of No Credit Auto Loan

Traditionally, young car buyers were considered extremely risky because they had no credit history. Lenders had no information to calculate the credit repaying ability of young buyers and so, they rejected their loan applications.

But, things changed with increasing competition. Lenders and online auto financing companies understood that they were losing a large segment of the market by avoiding people with no credit history. So, they introduced a special program called no credit auto loan.

Benefits of No Credit Auto Loan

If you are a young car buyer with no credit history and looking for a loan, you will have to apply for a no credit auto loan. The loan program is specially designed for car buyers without any substantial credit history. Following are the benefits of applying for the loan program:

You can buy a Car easily

Automobiles have become extremely expensive. A brand new automobile costs more than $30,000. Even a used car is available for more than $15,000. The higher price of cars has made loans indispensable.

Sadly, people with no credit history were not able to buy a car before the introduction of no credit auto loan. Today, the loan program is a boon for young car buyers because it provides them with a golden opportunity for buying the car of their dreams.

No more relying on Public Transport or Parents

No credit auto loan helps you buy the car of your choice. It means you don’t have to spend time in waiting for crowded and unreliable public transport. Moreover, you won’t have to convince your parents to let you drive their car. Total freedom, isn’t it?

You can get Lower Interest Rates

Most young car buyers without any established credit history shy away from no credit auto loan. They believe that the loan program is expensive and out of their reach. But, the reality is different. You can get low-interest rates by making down payment and bringing a co-signer. Down payment reduces the loan amount and manifests your stable financial condition. And, a co-signer ensures the lender of regular payments. Both these things reduce the lender’s risk and will definitely help you in reducing interest rates.

You can build your Credit Score quickly

To get a loan, you need a good credit history. But to build a good credit history, you need a loan.

It is common for lenders to check your credit score before approving your loan application. Previously, young car buyers faced the problem of loan rejection because of their inadequate credit history. But, no credit auto loan has solved this problem. Anyone with no credit history can get an auto loan at affordable rates and build their credit score.

It is a Better Option compared to Leasing

Leasing allows you to rent a car for a specific period of time. At the end of the lease contract, you have two options. You can return the car to the dealer or buy it from him. It means even after paying regularly for several months, you will have no right of ownership.

Such a problem will not occur if you obtain no credit auto loan. Every payment that you make will help you in becoming the owner of your car.

How to Get Started?

Now that you have understood the benefits of no credit auto loan, you must start the process of obtaining the loan program. The loan process is quite easy and can be completed online. You can take help of an online auto financing company and submit your loan application via internet.